Your are correct...if you buy a second home for investment or to be rented out, the interest rate will be higher than if you were to buy a your principal residence. Your lender can confirm that fact for you.
Regarding your tax treatment, it is always best to go to your professional tax person regarding your deductions.
In the state of California property owned by a wife and her husband, it would be considered community party. Again your tax professional can confirm this for you. If your own real in the state of California and it is only in your name and you have a husband, one can assume that that piece of real estate is your separate property. is that correct? But any subsequent properties you and your husband acquire in the state of California could be considered your community property. Please verify this with your tax professional.
Hope this has been helpful to you!
Just in brief:
QUESTION: If I'm going to buy 2nd home for investment, is it that the interest rate will be higher?
ANSWER: Yes. See below. And check with a lender.
QUESTION: How about the tax treatment? Can I deduct interest from income tax?
ANSWER: Check with a tax advisor. You may be able to deduct interest. You can also deduct depreciation and various maintenance and repair expenses. To oversimplify greatly, in most cases you'll count the income from the rental property and subtract from that all your expenses. The result, which is likely to be a negative number, is then subtracted from your taxable income.
QUESTION: If the 1st house is under my name & the 2nd house would be under my husband's name, can the 2nd house claim to be his primary residence?
ANSWER: No. That's tax fraud. Besides, although you may end up paying a higher interest rate for the second property, there are a whole slew of deductions that you can't take as a primary residence. So, even if you could claim the second house as your husband's primary residence, you wouldn't want to.
Again: Consult a tax advisor.
Any residence for which you'll obtain financing must be classified as one of these three:
1) Primary home.
2) Secondary/vacation home.
3) Investment property.
If you enter into any rental agreements, for the most part, this means the property will be an investment. Also, a secondary home must typically be located a distance away that would suggest it is not going to be used for income purposes.
In a majority of scenarios, the rates for primary and secondary homes are the same. Rates for investment homes are higher.
All of your tax questions should be directed at a tax professional and if you need a referral there I would be happy to provide one.
I believe you can CURRENTLY deduct mortgage interest on any number of properties.
I think you can also rent out your 2nd home and get all kinds of tax benefits (depreciation, expenses, ...) and still get the use of it for a small number of days a year without affecting those tax benefits negatively.
Talk to the tax advisor and search on the government and state tax websites - there's a lot of information there.