Should You Buy a Second Home?

Think owning a second home is only for the rich and famous? Think again. Being a dual homeowner is an achievable goal. And, it can come with a lot of perks. From having your own vacation home to collecting rental income, being a dual homeowner can offer some serious advantages.

However, a second home typically comes with a second mortgage. Being a successful dual homeowner, you need to be financially prepared. If you’re not, you can suddenly find yourself in a world of financial hurt.

Consider the following factors as you try and decide if a second property is right for you.


Do you have enough extra cash?

Like we said, you don’t have to be part of the 1% to own a second home. But, you do need to be able to afford a second mortgage. This means having enough cash for the down payment. And, it means having a large enough monthly income to afford the additional mortgage payment and homeowner’s expenses.


Is your DTI low enough?

A second mortgage is a second payment. It’s more debt. Just like getting approved for your first home, you’ll need to maintain a debt-to-income (DTI) ratio of no more than 42 percent. This ratio includes all your mortgage payments, credit card bills, car loans, and student loans.


Do you want that kind of commitment?

Even if you can afford a second home financially, do you want the commitment? A second home requires maintenance and upkeep. If you plan to rent it out, that requires management to approve renters, collect money, and attend to any issues that arise.

If it’s a vacation home, do you want that to be your primary vacation destination? You may love the idea of a place that’s all yours. However, exploring new destinations may be more of a priority for you. If so, tying up your finances in one location, might not be the best move. The key is to evaluate your goals before diving in.

Talk to Rob to begin exploring if a second home is right for you.


Should I Rent or Buy a Home?

The question of whether to buy a home or to rent has become controversial in recent years. Many people have rejected the notion of home ownership in favor of a lifestyle with fewer long-term commitments. Even so, there are some important reasons why it can be a good idea to buy a home of your own, rather than paying rent to a landlord.


  1. You can have it your way

With ownership, unlike renting, you don’t need the approval of a landlord in order to make design changes, or keep pets. You can live in a place that conforms to your lifestyle, and you can expand it as your needs change. Owning your own home offers considerable additional personal freedom and privacy compared to renting.


  1. What you buy, you keep

When you buy a house, you’re getting more than just a place to live; it’s a place to call home, perhaps even for future generations to call home. It’s a long-term commitment with long-term benefits. As you pay down a mortgage, you build equity that functions much like a savings account, stored in the form of a physical asset. It’s solid, it’s real, and once it’s fully paid for, it’s yours to live in and enjoy for the rest of your life. Renters pass up this opportunity to build something bigger than themselves.


  1. Long-term stability

Land is a scarce commodity, and it’s an especially hard one to create more of. Because of that, its value generally increases over time. The housing markets have their ups and downs, but the numbers have historically gone up over the long term. This is a good thing for homeowners who have a fixed-rate mortgage. The value of your property increases, but your mortgage remains stable and predictable, a cost you can count on. It’s less peaceful for renters, who often see rates rise along with property values, and their landlord’s expenses.


  1. Financial power

Owning a home offers several financial benefits that renters don’t enjoy so easily. When you always make mortgage payments on time, you can build up a powerful credit history. You’ll be able to enjoy access to bigger and better loans on cars, appliances, and financial investments. Substantial mortgage interest and property tax deductions are available to homeowners, but not to renters. You can also consider the possibility of becoming a landlord yourself, and renting out rooms or the entire house for profit. As the owner, you’re ultimately responsible for maintenance either way, so why not let someone else pay you for it? This is one of the roads to true wealth: by acquiring an asset that generates passive income, you can begin to make yourself financially free.

Questions? I’d love to talk to you about how you can get pre-approved for a home that builds your wealth.

Why Should You Buy in 2016?

Though 2016 is nearly over, home-buying opportunities are as attractive as ever. Mortgage rates have dropped drastically, and continue to hover at record lows. There are plenty of options still available that can help you finally get into your dream home, and there’s time left in the year for you to benefit! Here are a few reasons why 2016 may still be the time for you to buy.


Lower Home Prices

Real estate prices have dropped, allowing for an increase of supply for homes. This results in lower prices for those ready to buy and get moved in. Many homes are still available at low cost to the buyer.


More Availability

More and more sellers are willing to put their homes on the market, allowing the floodgates to open for new homes. Starter and middle-range homes are abundant, boosting inventory to make buying easier. Bidding wars may go away, and prices could fall even more.


Interest Rates

The Federal Reserve has been planning on raising the interest rate, which means low rates may not stick around beyond this year.


Rent is Going Up

Rental prices are expected to rise, which means that buying a home can be cheaper than shelling out extra money for rent. If buying a home sounds like a scary commitment, I promise you that the amount of money you’ll put into rent in the long run is much more significant.



When you’re looking for a home, it’s a good idea to get pre-approved for a home. This way, you know what you can afford, and start pricing the market.  Since homes are cheaper now than in recent years, you can get more bang for your buck.



Trying to time the housing market is like trying to predict the future without knowing all of the factors. Since the housing market is cyclical, you shouldn’t wait for that perfect time. The market can go up or down, it’s impossible to know where the market will go. But if the market has rates at a level that you can afford, there’s no better timing than the present.

The housing market has seen some tough times within the last decade, but has rallied and come back in a big way. Before mortgage and interest rates jump higher in the months and years ahead, make 2016 the year you win big with your dream home at low cost!

Ready to get preapproved and explore your options? Let’s talk, I’m here for you.

3 Lessons to Teach Your Kids How to be Money Savvy

Do you dream of your children becoming strong and independent adults? Do you imagine them as secure and financially stable?

Most parents do. Fortunately, you have the power to help them. With a few strategic lessons, you can teach them to be financially savvy.

Help them learn that patience is a virtue.

In a society focused on immediate gratification, it can be hard for children to understand the power of waiting. As a young tot, getting an ice cream cone or doll right away might not seem like a huge deal. Unfortunately, down the line this same mentality can lead your adult child to want (and buy) a new pair of shoes, fancy hat or luxury vacation right now.

Buying without being prepared for the expense often leads to debt. However, if you teach your child the virtue of patience, they’ll learn to take joy in having saved for their extras.

Consider giving a monthly allowance for “special purchases.” Once your daughter has saved enough for her new doll or your son his new baseball glove, they will each value that item much more.

Loan money with interest.

When your children leave the coop, borrowing money won’t be free. Loans will come with an interest payment. Teach them the principle now. If you loan them money – charge them interest.

Explain to them that the money they’ll spend in interest is like a rent payment. For example, if they borrow $10 at 10 percent interest, they’ll need to pay you back $11.00. The extra $1 is the cost of renting the $10.

Let them earn some dough. 

Nothing teaches children the value of money more quickly than having to earn it. Predetermine how much each chore around the house is worth. Maybe it’s $10 to mow the yard, $15 to clean the bathroom, and $12 to wash the car.

They’ll suddenly discover a new appreciation for going to the movies on Friday night.

2 Solutions for Bad at Home Cell Service

“Unplugging” is nice – when it is your choice. Unplugging because you have poor reception is an entirely different story.

It you are constantly on the hunt for a better signal while at home, you are not alone. The struggle is real. And, it is more than a little bit frustrating.

Fortunately, you don’t have to simply accept spotty cell phone service. With a little ingenuity, it is a problem you can solve. These are two of the easiest solutions:

Solution 1 – Cell Phone Booster

As the name would suggest, cell phone boosters are designed to boost cell service in a very specific area. They do so by taking an existing cell signal (typically found outside your home), amplifying it, and then broadcasting it within your home.

For a cell phone booster to work, your carrier must provide some service in your area. Additionally, your cell phone booster will need to be registered with your individual carrier. Each company can withhold its consent for usage. (They will typically only do so if you live in a highly populated area.)

Solution 2 – Enable Wi-Fi Calling

Wi-Fi calling allows your cell phone to make calls over your home’s Wi-Fi (aka wireless Internet). Currently, not all carriers offer this service. And, it is only available for compatible devices, such as the iPhone 6 series and some Android phones.

Think About a New Carrier

Finally, some carriers simply don’t provide coverage in all areas. This is particularly true of remote locations. If you have moved beyond the city limits and suddenly lost your coverage, talk to your neighbors. Ask them what carrier they use. It might be time to consider switching providers.

Have you found an additional way to fix your cell phone service woes that didn’t involve standing on your head? Give me a call today.

3 Steps to Be Prepared Financially for the End of the Year

By doing a little work now, you won’t suddenly find yourself scrambling to get your affairs in order come tax time.

Summer is behind us. It’s officially fall. While it’s hard to believe, the end of the year is just around the corner. Pretty soon you’re going to be patting yourself on the back for leaving up last year’s Christmas lights.

While you’re gearing up for the holidays, now is the perfect time to take a look at your taxes and do a few other financial chores. Do a little work now and you won’t suddenly find yourself scrambling to get your affairs in order come tax time. Sound good? We think so too.

Step 1 – Get a Handle on Your Tax Deductions

To make sure you aren’t giving Uncle Sam any more money than absolutely necessary, it’s important to know exactly what tax deductions you can take. For example, if purchase a new home, you can deduct the interest on your mortgage. Have kids who went to a summer day camp or after school care? Make sure to keep those receipts. Under the Child and Dependent Care Credit, you can deduct up to $3,000 for one child ($6,000 for two or more) if the activity allowed you or your spouse to work. (Unfortunately, overnight camps are not eligible.)

Step 2 – Manage Your Debt

Carrying a hefty credit card balance can be costly. You know that large pile of junk mail you haven’t had time to deal with? It could be your money saving goldmine. Sort through the stack for any credit card offers. If you have a decent credit score, you could secure deal for transferring your debt, such as 18 months with 0 percent interest. But, be sure to pay attention to the fees. If they are exorbitant, this will cut into your savings or eliminate it all together.

Step 3 – Block Out Black Friday

Block out Black Friday on your calendar. Remember, Black Friday is the day on which traditionally stores offer all sorts of bargains. It’s the perfect time to pick up Christmas gifts for loved ones and items you need. This year Black Friday is November 27. It’s by far one of the best times to score Christmas gifts and keep your holiday spending to a minimum. If you have a lot of techies in your life, you’ll also want to consider Cyber Monday.

Curious what other tax deductions you qualify for as a homeowner? Contact me today!


Tax tips and debt advice to round out the year by Brian J. O’Connor