Post # 1
FH and I are looking into buying a second home as a vacation/rental property. We bought our first home outright so we didn’t need to deal with a mortgage. After meeting with our financial advisor he recommended we finance the new home because of tax reasons. The home we are considering would require a 3200/month house payment after a 20% down payment, the home is located on the coast right near beach access but not directly on the beach (you can see the ocean from top floors).
This got me curious what others pay for a house payment and where? Care to share?
Post # 3
Can you share what the tax reasons would be for mortgaging a house if you dont need to? I dont possibly see how the tax benefits, I’m assuming the tax deductions for paying interest with a mortgage, could possibly outweight paying the actual interest. A tax dedcution only gets you back maybe 30% depending on your tax bracket so you still end up paying more in interest than you get back in the deductions for the lifetime of the loan.
Post # 4
@pinkshoes: I don’t know all the specifics- that is why I have a financial advisor 🙂 the main advantage was that interest will be tax deductible and we can also claim the property tax for future taxes (which is what seemed to be the better benefit). Its a way for us to not have to pay all costs upfront but retain that money without having to pay interest.
There is also a benefit for us to keep my savings account balance above a certain level, we gain interest that counters anything that we would have to spend.
Post # 5
It will differ greatly depending on what part of the country you live in. I’m in New England and for our condo we pay almost $1400/month plus an additional $300/month in condo fees. We also just got a 2nd house and that one is $1800/month. (Property taxes are included in those figures).
Good luck on your second home, thats so exciting, and to be near the water is awesome, Good luck!