More Canadians than ever are purchasing second homes. No longer the purview of the wealthy, second home ownership has gone mainstream. For many Canadians, it's the dream of a summer cottage, golf retreat or a winter chalet.
For others, career or family demands fuel the desire for a second home: for business stays, or to shelter the university student studying in a distant community.
Now that the Canada Mortgage and Housing Corporation(CMHC) has introduced a Second Home program - helping Canadians borrow up to 95% of the home's value - the purchase of a second home is easier than ever. And the attraction of the real estate investment is just as compelling with your second home as it is with your first. Not only can it be a good financial investment, but it's an important emotional investment too. Here are some things to keep in mind when you finance a second home:
Can You Afford It?
This is the most important question you have to ask yourself. If you are planning to purchase a second home, you'll want the best possible financing for your new real estate investment. There's no question that financing is easier than ever.
But a mortgage broker can help you figure out exactly how much second home you can comfortably afford. It's a great time to begin that conversation; market conditions are in your favour, and mortgage interest rates are still at a near all time historical low.
What Are Your Financing Options?
The CMHC Second Home program has been the big breakthrough for Canadian second-home buyers CMHC will insure a property purchased for a family member attending college or university away from home. And the program is very popular as a means of purchasing a vacation property.
There are a few provisos here: either the borrower must occupy the property for at least some part of the year, or a family member must occupy the property on a rent-free basis. The property must be winterized, and be accessible for year-round occupancy. And it must be located in Canada. Be careful with island properties; they should have year-round bridge or ferry access. Note, too, that program can't be used to purchase time-shares or similar rental pools.
What Do The Second Home Mortgages Look Like?
By far your best bet here is to talk to an independent Ontario mortgage broker with access to a wide range of lenders. The second home mortgage can vary widely in the rates and requirements.
Can I Leverage My Existing Equity In My Primary Home?
This is an option that your mortgage broker can help you look at. This involves a cash-out refinancing of your existing primary home mortgage with a higher borrowed amount. Instead of waiting and saving years for a second home, you can access money based on the value of your primary residence and your present financial profile to help you finance a second property.
A Second Home Mortgage For A Second Home?
Is this the right option for you? A second home mortgage is the most common way to use your home equity. No need to wait until you've saved a down payment for a second home investment, but you must have the funds and cash flow to comfortably make both mortgage payments. Your broker will work out the best terms for you.
It's your second home. That means that it's primarily for your own or your family's use (although you may rent it out casually and temporarily). If you're looking to purchase an investment property, your mortgage broker can help with that too... but it's not the same as purchasing a second home.
If there's a family cottage in your dreams or a student condo in your plans, this is the time to get serious about a second home mortgage plan to make it happen.
Check out your options.
Written by: The House Team
Second Home Mortgage Books
|
Mortgages For Dummies, 3rd Edition List Price: $16.99 Sale Price: $3.89 |
|
|
How to Save Thousands of Dollars on Your Home Mortgage, 2nd Edition List Price: $17.95 Sale Price: $7.56 |
|
|
Find The Home Mortgage That’s Right For You Finding the right mortgage can be complex, confusing, and frustrating. But that doesn’t mean you have to settle for anything other than the terms you want... |
|
Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Finance List Price: $17.95 Sale Price: $10.81 |
|
|
Carolyn Warren better get a bodyguard. Her new tell-all on the mortgage industry exposes so many of the lending industry's favorite frauds, every loan officer from Seattle to Miami is going to be gunning for her! Mortgage Rip-Offs and Money Savers is like a map that guides you around the carefully camouflaged landmines laid by lenders... |
|
The National Home Mortgage Reduction Kit: How to Cut Your Mortgage in Half & Own Your Home Free and Clear in Just a Few Short Years List Price: $26.95 |
|
|
The Complete Idiot's Guide to Success as a Mortgage Broker List Price: $19.95 Sale Price: $8.26 |
|
|
Break into the brokerage business. Here is a step-by-step handbook to joining this elite group. Written by an accomplished mortgage broker with more than 15 years in the business and 2,000 deals to his credit, this book covers everything from whether or not real estate financing is the right career move to how to master the skills necessary to be successful... |
 |
The Complete Guide to Reverse Mortgages: Turn Your Home Equity into Instant Income! List Price: $12.95 Sale Price: $2.00 |
|
Until recently, there were only two main ways you could get cash from your home: sell it or borrow against it and make monthly loan repayments. Reverse mortgages offer a third way of getting money from your home... |
|
Mortgage-Free!: Radical Strategies for Home Ownership (Real Goods Solar Living Book) List Price: $30.00 Sale Price: $14.67 |
|
|
The origins of the word "mortgage" are Old French and translate roughly to "death pledge." Rob Roy takes a radical approach here to help the reader understand how mortgages work; explains clearly how, if you have a mortgage already, you can maximize your equity sooner and save tons of money; and how, if just starting the process of acquiring a home for yourself, there are clear alternatives to a standard bank mortgage that will save you massive amounts of money, time, and financial headaches... |
|
How to Buy a Home With No or Poor Credit List Price: $24.95 Sale Price: $6.68 |
|
|
Own your own home-regardless of your credit rating You can be a homeowner—even if your credit is nothing to brag about or virtually non-existent. This practical, fact-filled guide shows how to achieve your goal of home ownership with your current credit... |
|
Mortgage Free!, Second Edition: Innovative Strategies for Debt-Free Home Ownership List Price: $24.95 Sale Price: $14.91 |
|
|
As a wave of foreclosures sweeps the country, many people are giving up hope for owning a home of their own. They have good reason to turn their backs on the banks, but not on their dreams. In this revised edition of Mortgage Free!, Rob Roy offers a series of escape routes from enslavement to financial institutions, underscored by true stories of intrepid homeowners who have put their principles into action... |
|
Navigating the Mortgage Maze: The Simple Truth About Financing Your Home List Price: $12.99 Sale Price: $0.90 |
|
|
Confused or overwhelmed by the “mortgage maze”? Industry pro Dale Vermillion explains the simple truth. Learn about wise mortgage financing, and how to avoid common traps that cost you thousands of dollars! Chapters include: • The Top 10 Mortgage Mistakes • Simple Truth about Interest Rates and APR’s • Mortgage Industry Dilemma • The Simple Truth About Debt • Qualifying for Mortgage Financing • Establishing Financial Goals • Mortgage Refinancing as an Investment Tool • Borrowing Smart • Mortgage Independence • Moving to Real Life Change |
Popularity: 1% [?]
Related posts:
