Should I Buy a Second Home?

Photo by Paradise Realty

HOTTY TODDY! The Ole Miss Rebels just won their FIRST National Baseball Championship this weekend! We could not be more excited and proud of our Ole Miss Rebels! With the success of our baseball team, the excitement of fall football in The Grove, the upcoming women’s volleyball and basketball season, the anticipated Ford Center season of shows and all of the other fantastic events that Oxford and the University of Mississippi offer, we’ve had many clients looking to buy a second home in Oxford.

With current mortgage rates still at a historic low, you may be ready to purchase that second home in Oxford, but make sure you consider this advice from a recent realtor.com article and ask us for local lender recommendations so they can help guide you through the financial process.

First, can you afford to purchase a second home? Lenders are going to look much more carefully to make sure that you can pay for two mortgages. Most will require more down payment and a higher credit score. They will also look more closely at your debt-to-income ratio. Make sure to review your budget, keeping in mind the higher down payment and factoring in a healthy, emergency fund and cash reserves.

Second, understand exactly how you plan to use your second home. Buyers should consider their stage of life, the type of home and how much enjoyment they will get from the home. For most home owners, a second home should not be a fixer upper. Also, consider the location of the home and its resale value. That’s where a good Neighborhood Realty agent can come in handy to help guide you in the second-home real estate market.

And finally, understand the tax implications of purchasing a second home. Not all “tax breaks” apply to second homes. If you decide to rent your home as a vacation rental, you will need to consider many factors as property tax rules and deductions for second homes used as rentals vary and are quite complicated. Always talk to a tax professional before buying a second home that you will use as a rental.

Congrats to our Ole Miss Rebels baseball team and let us know if we can help you find your second home in Oxford!