by Cameron Mackie | May 5, 2022 | Mortgage and Consulting Services
If you are dreaming of your very own vacation home, there are ways to make it happen! Let me walk you through your options.
When it comes to taking on a vacation property, you will need to have a minimum down payment of 5% of the purchase price. If you are purchasing a non-winterized vacation home, or will not have year-round access, then you will be required to put down 10%.
You must also have sufficient credit score to qualify if not putting 20% down. In addition to the down payment, you will also need to pass the stress-test and prove that you can financially carry the mortgage of your existing live-in home and your new vacation home.
When purchasing a vacation home or property, most lenders will allow you to borrow money against the equity you have in your current home and use it as a down payment for a second home. This is called mortgage refinancing. Mortgage refinancing means getting a re-evaluation on your home and then redoing your mortgage based on the current value. This will allow you to tap into the equity your home has built over the years, and pull out the extra funds for a down payment on your secondary property. Keep in mind, when using some of your current equity, it will increase the principal amount and the interest payments on your mortgage as the mortgage is now refinanced at a higher amount.
Another option to unlock your home equity is through a line of credit or a HELOC (Home Equity Line of Credit). This option allows you to borrow money using the equity in your property, with the property as collateral. A HELOC serves as a revolving line of credit to allow the borrower to access funds, as needed, letting you utilize as much (or as little) equity as required. In Canada, you are able to borrow up to 65% of your home’s value using this method. Keep in mind, your HELOC balance AND current outstanding mortgage cannot exceed 80% of your home’s value when added together.
If you are ready to purchase a vacation property, I would love to help review your financial situation! I would be happy to take a look at your current mortgage, equity and review your options to help you find the best fit. The keys to success are right around the corner with a little bit of expert advice.
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Welcome
In order to receive your free book we require some details from you.
We do not ask for your phone number, and we will never attempt to contact you by phone, unless you ask us to. We will never sell or share, your information with third parties.
Please forward our website link to your family and friends. They can download The Book for free as well. However, you agree, in order to receive The Book, to not copy, or forward an electronic copy of the Book, once you have downloaded it, as this will not count towards our official download statistics.
IF YOU FIND THE INFORMATION CONTAINED IN THE BOOK HELPFUL AND INFORMATIVE, PLEASE CONSIDER USING OUR BROKERAGE SERVICES.
Thank you and happy reading.
Due to new anti-spam laws, you must check the I AGREE BOX, that signifies your consent to receiving The Book, and that you consent, to receive our Newsletter. You can unsubscribe from the Newsletter at any time. Please complete the form below to download the book.
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