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The cold and blustery days of winter may have you dreaming of a warm-weather escape. A tropical beach, perhaps — or just a city that's not inundated with ice and snow for months out of the year. If you find that pining for a warmer climate has become an annual event, it may be time to consider buying a second home.

Rather than paying for hotels or rentals during your winter vacations, purchasing a second property could be the more attractive option. If you have a go-to getaway spot, that may be the obvious choice for where to buy. Alternatively, think back to the places you've enjoyed your winter escapes the most. What drew you to them? Maybe there's one spot where the weather was mild, the local fresh food was affordable, and you simply felt like you belonged. Buying a second home would allow you to become part of the community in a place you love without sacrificing the life you have in your current residence.

Deciding Whether to Buy

There are many considerations to take when purchasing a second property. The first is whether you can afford it. A second home in a warm weather paradise may sound like a dream come true, but it will turn into a major stressor if you stretch your finances too thin.

If you're comfortable taking on a second mortgage, you can begin looking at properties in your desired location. You may decide that a beach bungalow is the perfect second home for you, or you might opt for a larger house that can accommodate not just your immediate family, but relatives and friends who want to visit as well.

In the latter case, you might look into jumbo mortgages, depending on housing prices in the area. A jumbo loan is a product offered by private lenders for homes with purchase prices too high to qualify for federal guarantees. The Federal Housing Finance Agency sets these conforming loan limits, and the government-sponsored enterprises Fannie Mae and Freddie Mac will not purchase or guarantee loans above those amounts. In 2021, the conforming loan limit in most parts of the country is $548,250. However, in areas where the median home value is above $548,250, the conforming loan limit increases to $822,375.

Tax Considerations

Before purchasing your second home, make sure you have a good understanding of how buying this new property will affect your tax opportunities and obligations. Consider the implications of the new tax law, claiming property tax on both homes, and whether or not you plan to rent out your second home while you're not there — along with the taxes you'll owe and potential tax deductions you'll benefit from if you do.

Buying Your Forever Vacation Home

Once you've worked through the financial and tax implications of buying a second home, the fun part begins — finding the property you want to buy. While there are many places from which you can choose, think about what you want your life to look like each winter. What type of climate would you enjoy? What types of food, entertainment, and scenery? Have fun imagining your ideal getaway, and then you can start planning for your forever vacation home.

This information and recommendations contained herein are compiled from sources deemed reliable, but are not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or are offering any tax, accounting or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third-party website that may offer a different privacy policy and level of security. The third-party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend or guarantee any product or service available on that entity's website.

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