How to buy a second home – a detailed guide of your options

I am often contacted by past clients asking me how to buy a second home in Canada.  We are very experienced in helping our clients purchase second homes.  The first question that I ask them is who they are purchasing the second home for.  The answers tend to fall into three categories:

• A recreational home for them and their family to use
• A home for their children to live in while they are attending post secondary education
• A home for their elderly parents

The good news is that all of the above reasons qualify for a second home mortgage in Canada.  The question now that we have identified the Why is the How?

How to buy a second home:

The biggest consideration once we determine why we would like to purchase a second home is how much money would I like to use for down payment?  The two main categories are:

• 5-10% down payment second homes
• 20% down payment second homes

In terms of mortgage rates and terms, they will be identical, with the only difference being with less than 20% down payment we will have to obtain CMHC insurance.  As it relates to your income, with a second home the qualifying is very similar to a normal mortgage qualification except we will have to approve your new mortgage while still factoring in your existing debts including current home debts.  We endeavour to ensure that we answer your questions about how to buy a second home in very clear and understandable terms with our goal being to make your purchase as straightforward and enjoyable as possible.

Some common “how to buy a second home” questions:

• Can I purchase a rental property with this program? – No, with 5-10% down payment, the CMHC guidelines require the home to be owner occupied one month out of the year by you or a family member on a rent free basis.
• If I have seasonal vacation renters in my second home can I use that income to qualify?  – No, second homes must be qualified without the use of any additional rental income from the property.
• What is the minimum down payment for a second home? – It is 5% of your purchase price
• What are the rates and terms available for a second home? – We are able to obtain best rates and terms for our second home purchasing clients.