Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.
As with any home, the costs of a second home don’t stop at the mortgage.
There are a lot of costs associated with owning a second home, and you’re responsible for anything that comes up. You’ve probably considered the costs of property taxes and HOA fees for your second home, and factored those things into your budget when deciding how much you can afford to spend on a second home.
But, there are some expenses you may not have thought of that will apply to your second home. Here are three expenses you should consider before making the leap to a second home.
You may need to increase your life insurance and disability insurance coverage
If you haven’t considered how owning a second home could affect your life insurance and disability insurance coverage, you probably should.
Mortgage debt should be factored in when deciding how much life insurance coverage you need. Buying a second home could mean taking on a second mortgage, so you’ll want to make sure that your life insurance coverage is high enough to cover both home payments, if necessary. But, increasing your coverage amount could mean adding to your monthly cost for life insurance.
Similarly, disability insurance can help you pay the bills each month if you become disabled but rely on an income to make ends meet. It can provide a replacement income to pay the bills if you’re ill, injured, or otherwise unable to work. While it’s sometimes offered through your workplace, that coverage often isn’t enough.
“Have enough disability insurance that you can