Purchasing a Second Home
March 18, 2018 | Posted by: Allison Kurys & Kim Owen
Are you considering purchasing a second home or possibly a cottage property this Spring or Summer?
Did you know that if you are purchasing a second home you can put down as little of 5% of the purchase prince? Lenders will insure the mortgage through CMHC or Genworth who allow buyers to put a down payment of 5% as long as the property is being occupied by the client themsleves or an immediate family member and is not being rented out.
As a buyer you will need to ensure that all cottage properties must have year round access and are winterized. If the property is on an island there must be year round ferry access to the property. The insurer will also want to confirm the property is in good condition with accessable drinking water but will allow lake or river water provided the property has a filtration system.
Purchasers buying a second home for a relative to live in must confirm the family member will be living in the home rent free. The family member is not required to be on title of the mortgage. Nowadays we see many clients purchasing second homes for children who are going off to College or University or an elder parent to live in.
A down payment for a second home can come from the purchasers savings, investments or even the equity from their current home. Remember if you are taking equity out of your current home you must make sure that you qualify for the new mortgage on your primary residence and the second home.
If you're looking for a second home and you're unsure if the home meets the qualifications required with CMHC or Genworth don't hesitate to contact us and we will guide you through the process.
Happy House Hunting!