Mortgage For Vacation & Second Home Properties

"Investing In Your Future"

A second home is often looked at as an investment property, but not always are they the same. While an investment property generates a form of income, often through a residential rental home, a commercial property, or a mixed use of both, a second home may be attained as a vacation home, a cottage, or just a second property used as a weekend retreat. With as little as 5% down and subject to qualifying, you could own your very own second home today. Ultimately, in the end, it all comes down to the art of leveraging.

Generally when it comes to secondary properties, people don’t tend to consider using the equity in their home to buy an investment property. Did you know that when purchasing a secondary property, whether that be a vacation home, a weekend retreat, or even a home for your parents or children, most lenders will allow you to borrow up to 80% of your home’s current value to fund that purchase? This is done through the process called mortgage refinancing. This will allow you to tap into your hard earned home equity to secure enough capital for a down payment on your second property.

However, this is not your only option to securing your down payment. Another option to unlocking your home equity is through a Line Of Credit or even a Home Equity Line Of Credit (HELOC). This simple process allows you to use your home as collateral while borrowing against the value of your home. A Home Equity Line of Credit (HELOC) not only serves as a revolving line of credit, allowing you access to funds as needed, but this option also helps you avoid any lender penalties when breaking your mortgage.

Before taking on a secondary property, it’s important to note that you will need to have your down payment ready (whether that is from your savings or your home equity). The process will remain the same as your first mortgage including a minimum down payment of 5%. However, if the property is a non-winterized vacation home or if It will not have year-round access, then you will be needing a 10% down payment. This includes a minimum credit score of 680 if you are putting less than 20% down and you will be subject to qualifying guidelines proving you can financially carry both mortgages.

Contact us today at Riley Boychuk Mortgages for more information.

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