Second house question

[Anonymous]

We are planning to buy a second home in Florida. We plan to spend more than half the year there. It will become our primary residence. We will have a primary mortgage on this new home. We also plan to sell our existing Md home in a year or so. We just want to make sure we like it there. We still have a small amount to pay on our existing Md mortgage.

We plan to do everything we need to do (change mail, bank, drivers license, car registration, etc.). Is there any concern you know of about our primary residence in MD becoming our secondary residence? We will not be renting out either property.

[Anonymous]

Just be sure to sell no more than 2 years after making the Florida house your primary residence. To get the capital gains exemption on the first $500k of your Md home appreciation.

[Anonymous]

Anonymous wrote:Just be sure to sell no more than 2 years after making the Florida house your primary residence. To get the capital gains exemption on the first $500k of your Md home appreciation.

No more than 3 years, not 2. You qualify for the exemption you need to have resided in the property for 24 months out of the last 60.

[Anonymous]

Anonymous wrote:We are planning to buy a second home in Florida. We plan to spend more than half the year there. It will become our primary residence. We will have a primary mortgage on this new home. We also plan to sell our existing Md home in a year or so. We just want to make sure we like it there. We still have a small amount to pay on our existing Md mortgage.

We plan to do everything we need to do (change mail, bank, drivers license, car registration, etc.). Is there any concern you know of about our primary residence in MD becoming our secondary residence? We will not be renting out either property.

Also, make sure you can get homeowners and flood insurance. My mom and grandma both have homes down there (one directly on the ocean & one not) and both have had issues with insurance even though they have never used it.

My grandmother pays an insane amount of $ for her premium and I think had to find a new insurance company recently. I read that certain insurance companies are leaving in droves, not renewing, canceling policies, and raising premiums. So make sure you can pay for that premium that will continue to increase! What will you do if you can't get insured? Maybe a good idea to rent first and check out different areas.

[Anonymous]

Anonymous wrote:Just be sure to sell no more than 2 years after making the Florida house your primary residence. To get the capital gains exemption on the first $500k of your Md home appreciation.

+1 It's 3 of the last 5 years, but good point. Put your home on the market 1-2 years from the time you declare your FL home as your primary residence so you have time to sell for a good price without losing that tax exemption.

[Anonymous]

You can’t get a primary mortgage on FL house if you still have a mortgage on the Md house.

[Anonymous]

Anonymous wrote:You can’t get a primary mortgage on FL house if you still have a mortgage on the Md house.

True but they can get a second home mortgage which is more similar to a primary than to an investment property mortgage.

[Anonymous]

Anonymous wrote:You can’t get a primary mortgage on FL house if you still have a mortgage on the Md house.

Nonsense. If the MD house loan is an established loan. Like you say it is, you can mortgage the new FL house with a primary mortgage loan.