Purchasing a second home is becoming more and more popular amongst Canadians. A second home could be anything from a cabin getaway to a rental property. Many people have dreams of owning multiple homes, beyond that, many people dream of having property in which they can retreat to, or use for generating extra revenue.
“Real Estate cannot be lost or stolen nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care it is about the safest investment in the world.” Franklin D. Roosevelt
Before launching into the process of purchasing another home on top of the home you already own, there are some considerations to take into account that differ from purchasing your first home.
What Can You Afford?
This question is undoubtedly the most important question. If purchasing a second home will lead to financial strain, is it really worth it? Your mortgage broker will help you figure out what property type is within your reach, and what is not. The question is not if the financing is available, it’s how much you can afford without spreading yourself too thin.
What Do These Mortgages Look Like?
Mortgages for a second home purchase can vary widely in rates and requirements. As no one person’s situation is identical, you need a mortgage broker to get the best advice for your unique needs. Mortgage brokers have a huge network with access to a large range of lenders, and as such, are your best bet to getting financing that works for you.
How You Can Use The Existing Equity in Your Primary Home
Rather than saving up money for a second home over several years, you can access money based on the value of your primary residence. You can use your current financial profile to help you finance a second property. This is an option that you will need to consult your mortgage professional about.
Should You Get A Second Mortgage?
A second mortgage requires borrowers to have both the funds and the cash flow immediately. If this is the case, you will be able to purchase your second home more quickly. This is a common option, and something that your mortgage broker will be able to negotiate for you.