Real Estate Financing Tips for a Second Home

There are different real estate financing methods that can help you purchase a second home. If you are in the market for a second home, you are undoubtedly excited to get started shopping, however, it is not in your best interest to rush in and get the first loan that you can get. Here are a few things that you will want to consider before you jump in.

Home Equity Loan

Using a home equity loan on your existing home could be one of the best options that you have. If you have a low mortgage balance or your home is paid off, this is a great choice. For one thing, you will be able to deduct the interest that you pay on your taxes at the end of the year. This will also be beneficial because only one of the homes will be at risk of default.

Mortgage

Getting a mortgage will provide a lower monthly payment than a home equity loan. The loan can be amortized over 30 years, instead of 10, like with most home equity loans.  Also, getting a mortgage can help you budget your expenses for your owner occupied property and your second home separately.

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