Second Home Buyers

LOOKING FOR A SECOND HOME?

THERE ARE FINANCING PROGRAMS THAT CAN HELP YOU LEVERAGE YOUR SECOND HOME!

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As a second home buyer, there are different goals and variables to be considered in order to achieve your financial and personal goals. You have to consider aspects such as the right financing, type and use of property, tax considerations and financial goals and the right broker/real estate agent.

The Right Financing

There are several mortgage programs available to first time buyers depending on the credit report and history, income levels and debt ratios. Which one is the best for you? What you need to do first is the following:

  • Get the services of a creditable, honorable and knowledgeable Mortgage Loan Consultant. Loan officers will advise you about the best options available based on your credit scores and history, current income and debt.
  • Make sure that every single aspect of the loan program is explained to you at its best. This information should include all terms and conditions of the loan (type of interests rates, terms, penalties, closing costs, etc.)
  • Get a good faith estimate from your Mortgage Loan Consultant and make sure you understand how all the numbers are generated.
  • Once you understand all the terms and conditions of the loan program you decide to choose, provide all the right information to the Mortgage Loan Consultant, so the loan process can get started and be ready for a loan pre-qualification.
  • Once you have gotten the loan pre-qualification you are ready start looking for your dream house.

Type and Use of Property

As a second home buyer, you need to know what property is most convenient to you based on your financial and personal goals, and what your future plans are ahead. There are a few aspects you should consider when buying an additional house:

  • Location and geographical area. Where the property is located is a key factor. Easy access to freeways, shopping malls, schools, restaurants, downtowns, country clubs or sport facilities. Remember location brings most value to residential properties. Hills, lakes or any kind of reserved land next to the property will bring solid value to the property.
  • Property taxes. This aspect is important as some properties appreciate higher than others depending on location and county property assessment value. Remember, the higher the appreciation the higher the property taxes.
  • Use of property. If your second or additional home will be a rental income property you should consider aspects such as HOA (homeowner associations), maintenance, property appreciation, property taxes, etc. All these aspect will impact significantly your rental income. If you are flipping to remodel a property then supply and demand is critical. A flip property will sell higher and faster in highly demand areas. Also, size of property will have an impact as far remodeling costs are concern. If your second home will be your primary home, then make sure you get the right type of mortgage as this will make a significant impact on your down payments, tax implications and rental income on your other(s) home.

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Tax Considerations and Financial Goals

You should consult a tax/accountant expert to advice you about rental income tax, short and long capital gain tax, mortgage interest deduction limitations, allowable property expenses deductions and property valuation declaration. Tax issues and implications will impact your financial goals. There are legal ways to reinvest your capital gains from the proceeds from the sale of another property, instruments such as the 1031 like-kind exchange allows you to reinvest such profits or capital gains in another or other properties without paying taxes.

Read more about this here.

The Right Broker/Real Estate Agent

In the past 6 years the number of real estate agents have decreased considerably due to the housing and mortgage crisis. This situation has strengthen those real estate professionals who strategically adapted to unstable market conditions and strived in such scenario. A good and experienced agent will always be a performer and a busy real estate professional. Choosing the right agent is critical important when looking for a property. What should you look for a real estate agent when looking for your house?

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At REAL ESTATE PLUS USA, we have agents that will exceed your expectations as well as the quality of service we provide. Our agents are carefully selected and personally trained by the president of the Company, Rod Moreno who has an extensive knowledge in the real estate industry as well as in the business world.

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