Buying an Outer Banks Investment Home

So, you’re thinking about buying an investment home on the Outer Banks of North Carolina. Congratulations! Our TowneBank Mortgage Loan Officers located on the Outer Banks are ready and well-equipped to help you with your second home purchase.

Here are some helpful tips about financing a vacation home:

• A vacation home, or second home, is a residence that you plan to occupy for part of the year. It’s typically used as a vacation home but could also be used as a property that you visit on a regular occasion—such as an apartment in a city you visit frequently for work.
• Typically, vacation homes must be located a certain distance from your primary home, or in a resort area, such as the Outer Banks of North Carolina. You cannot typically own another home in the same area.
• Borrowers who want to purchase an Outer Banks investment home must have enough income to qualify for monthly payments and will typically need a sizable down payment, of at least 10%.
• To qualify for a second home, a borrower must ensure that the home will be occupied only as a second home and that the property will be kept available for the borrower’s exclusive use and enjoyment. This means that the borrower cannot use the home solely as a time-share or rental home. If there is seasonal rental income on the home, you cannot use any rental income for qualifying. This doesn’t mean you can’t rent out your vacation home on occasion, which is a common misconception.
• Your vacation home is considered a dwelling unit if you use it for personal purposes for 14 days during a taxable year or use it for 10% of the total days you rent it out to others. In fact, borrowers may rent out their vacation home for 14 days throughout the taxable year without reporting any income to the IRS. You cannot deduct expenses associated with renting the property, but can still deduct mortgage interest, real estate taxes, and casualty and theft losses, according to the IRS. You should consult your tax advisor for more details.
• Local property management companies allow homeowners to be absentee owners but still have full control to use the property whenever they want for however long they would like. The property management company can help you keep track of rental usage and report it to the IRS.

Discover your next Outer Banks investment home and contact a Coldwell Banker Seaside Realty agent for all your real estate needs.

When you’re ready to commit to a second home in paradise, give one of our Outer Banks Loan Officers a call. Visit TowneBankMortgage.com for more information.

NMLS# 512138

TowneBank Mortgage is not a tax consultant. Contact your tax advisor for more details. The information contained herein (including but not limited to any description of TowneBank Mortgage, its affiliates and its lending programs and products, eligibility criteria, interest rates, fees, and all other loan terms) is subject to change without notice. This is not a commitment to lend.

The information contained herein (including but not limited to any description of lending programs and products, eligibility criteria, interest rates, fees, and all other loan terms) is subject to change without notice. This is not a commitment to lend.

Disclaimer: Content provided by TowneBank Mortgage for informational purposes only. The information contained herein (including but not limited to any description of lending programs and products, eligibility criteria, interest rates, fees, and all other loan terms) is subject to change without notice. This is not a commitment to lend. TowneBank Mortgage  NMLS #512138. Equal Housing Lender