Triston Rans - Calgary Mortgage Associate

Financing a Vacation / Secondary Home

I am a homeowner, and would like to purchase a vacation / secondary home. What are my financing options?

Taking on a second mortgage is not a step most homeowners take lightly. But with more and more people seeking second properties, a market that has expanded in recent years, and it is now easier than ever.

Even 100% financing on a second home or recreational property in Canada is now an option!

Canadian mortgage insurers (CMHC, Genworth, AIG) have become less conservative in their practises as competition has increased. The use of an insurer will be required if you wish to obtain mortgage financing greater than 80% of the purchase price of your second property or vacation home. In some cases, if the property is in a remote location, mortgage insurance may be required regardless of the size of your down payment.

In order for a property to qualify as a second home, it must be the intention that the property be occupied at some point during the year by either the borrower or a relative of the borrower on a rent free basis. As well, the property must meet the following requirements:

* The property can be located anywhere in Canada but must be suitable and available for year round occupancy. Properties constructed for seasonal use, or have seasonal access are not eligible.

* Properties located on an island must have year-round bridge or ferry access.

* The property cannot be a time-share interest, life leases or be in a rental pool.

As with all purchase transactions, your credit rating is key and your income must be sufficient to service all debt. This includes all expenses associated with your primary residence and any other consumer debt. Any rental income that the property may generate can not be considered.

It is important to keep in mind that buying property in another province will involve using realtors, lawyers and home inspectors in that province. There may be differences that province’s law for purchasing property than that of your current residence.

As a prospective buyer, you might find it easier to start the process by asking for recommendations from trusted sources, such as your Mortgage Specialist. Most are able to assist you with all purchase transactions in Canada, regardless of the province their license is held.

For more advice on your personal mortgage needs, please contact Triston Rans, at The Mortgage Group, at 571.8142 ext. 237 email tristonrans@mortgagegroup.ca. Or visit www.tristonrans.ca

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