For those considering purchasing a second home in Southwest Florida, you have probably already experienced some of the luxurious amenities accessible within the SWFL community. Close proximity to the Gulf’s beautiful beaches, luxurious shopping outlets, and scrumptious eateries that will blow you away are all a part of the Southwest Florida culture.
Nonetheless, it is important to know the real estate market here in SWFL, to take your time in selecting a home, and to conduct extensive research before you dive into purchasing your second home. Here are some questions to ask yourself and some great tips for second home buyers in Southwest Florida.
- Consider Your Options. How often will you visit your second home, and how much time will you spend there? What will you do with your first home? Is it worth selling? Take into consideration annual costs for landscaping, association dues, garbage collection and taxes. Are all of these items included in your budget?
- Will this be an Investment? What will the price appreciation be realistically? Are you going to invest in a home that you can sell in the future and make somewhat of a profit? Or are you looking to settle down in this home more permanently?
- Insurance. Make sure you choose the insurance you need, especially in Southwest Florida since we are so close to the beach. There are also hurricanes and other storms you must take into account.
- Compare Mortgage Products. Loan standards and rates are practically identical when comparing primary and secondary homes. Unless the lender considers the house as an investment property, they could quickly push the interest rate up to 2 percentage points.
- Making a Down Payment. You can use the equity from your primary home to make a down payment on your second home. There are two ways to do this: extract equity by taking out a “cash-out” refinance or get a home equity loan or an equity line of credit.
- Interest on Mortgage. Usually, interest on a mortgage for a second home is deductible from federal income taxes. However, if you borrow funds from the equity of your first home to make the down payment on your second home, you can only write off the interest on the first $100,000 of equity debt.
As a second-time buyer, you have many advantages. You have experienced the home buying process before and know what to expect from the process. Take your time in making wise choices during your second home buying experience, and your second home indefinitely be all that you expected it to be.
Need Help Purchasing a Second Home in Southwest Florida?
Purchasing a second home in Southwest Florida doesn’t have to be an overwhelming process. If you’re unfamiliar with the area or are simply looking for support, Chip and Deanna of Luxury Homes are your resource for all things related to Southwest Florida luxury real estate. With over 14 years of experience in the luxury real estate market in SWFL, Chip and Deanna provide an unparalleled level of concierge customer service to help you find your dream luxury home.
For more information about purchasing your second home in the Southwest Florida area, contact us today!