Maybe you want a vacation home to visit on weekends, holidays or in the summer. Or you’d like to live in the home when you retire or pass it on to your children. Owning a second home may come with perks, like potential tax write-offs, depending on how you use it. But a second home for vacations is very different from an investment property you buy to generate income. That difference can affect your finances, including the taxes you owe on the property and the type of insurance coverage you need.

First things first: Consider whether you have the down payment you need and if you can afford to take on a second home mortgage. Do you have a stable income and a cash reserve? Keep in mind the additional expenses of owning a second home such as property taxes, insurance, maintenance, repairs, furnishings and property-management fees. The tax implications of a second home largely depend on the type of property you buy and how you use it. Consult a tax professional for guidance on how a second home purchase could affect your taxes, since you may be eligible for mortgage interest deductions. Learn more about preparing your finances and the other stages of the homebuying process.

You may be able to get a lower interest rate on your loan if you make a large down payment, since you borrow a smaller percentage of the property’s value. (This is the loan-to-value ratio.) Loans available for vacation homes tend to be more conservative than those for primary residences, and you may need a down payment of 20 percent or more, especially if you need a jumbo loan. (Bank of America offers jumbo loans.)

Generally, lenders also want your debt (including the potential new mortgage) to represent no more than 36 percent of your monthly pre-tax income. This percentage is your debt-to-income ratio.

A professional loan officer can help you better understand the costs of purchasing a second home and the available loan options. You can also be prequalified or preapproved for a loan before you start looking at properties.

Your lender looks at your current financial situation and the property you want to purchase and advises you on your eligibility for different types of loans. If you are a Bank of America client, you may be eligible for a reduction in your mortgage origination fee through the Preferred Rewards program.

Buying a second home can be complicated and may take some time, but with forethought, preparation and some help from experts, you can make an informed decision that's appropriate for your situation.