Buying a Second Home

The process of buying a second home or vacation home is much like the process of buying a first home (or 'primary residence' in mortgage parlance). Some considerations are different. First, if you're planning to rent out the vacation home for a part of the year, there are implications to the size of the mortgage you'll qualify for. Second, whether you rent it out or not, there are tax implications. Only the interest on your primary mortgage is deductible on your income taxes, so you won't enjoy that deduction on the mortgage on your second home.