When purchasing a home, properties are generally classified into three main categories: primary residences, second homes, and investment properties. Each classification serves a specific purpose and may have different financial considerations.

A primary residence is the main home where the owner lives most of the time. This property serves as the homeowner’s principal address and is usually eligible for the most favorable loan terms and tax considerations.

A second home is an additional property owned by the homeowner, often used for vacations or as a seasonal residence. It is not intended to be a rental property, and the owner typically resides there for part of the year.

An investment property is purchased with the intention of generating income, either through renting it out or reselling it for a profit. Unlike primary or second homes, investment properties are not usually occupied by the owner, and they often have different loan qualification requirements and tax implications.