There are many reasons to purchase a second home in Canada. You may want to provide your child who is going away for college or university with a place to live, or you would like a vacation home, a home for an elderly relative, or a house you can stay at while away on business. Securing a mortgage for a second home will require following specific regulations and procedures that are different than for first-time home buyers. Here is what you need to know.
Second home mortgages could require as little as a 5% down payment
With the Second Home Mortgage Program in Canada, you could borrow for up to ninety five percent of the value of your second home. There are a few restrictions to keep in mind when considering this program, though.
You or another family member must live at the home at least part of the year
Whether this means your university-aged son or daughter lives there for the school year, or or you use the property during vacation or business travel, you should keep in mind that this mortgage is meant to be used to secure a living space for your family to some extent. On the same note, you cannot make an income off of this home by charging rent. If you’re looking to purchase an investment property, Rakhi Madan Mortgage Agent can still help you with the home purchase but do keep in mind that this is a different matter.
Though you do not have to live there all year long, the home must be accessible throughout each season–keep this in mind if you are considering an island property.
You may be able to refinance your primary mortgage to speed up the process
A mortgage broker can help you determine how you can leverage your current home’s value and your financial situation. This may mean that you can access money to be used on the down payment.
Contact us to find out more on how a Brampton Mortgage Broker can help you.
