" Buy your second home with as little as 5% down. "
Buying a vacation or second home - whether for weekend getaways, to reduce commuting time to work, or to simply have a second residence in another place - can be achieved with as little as 5% down and an affordable monthly payment.
If your goal is to borrow more than 80% or the purchase price or refinance up to more than 80% of the appraised value, the mortgage will need to be insured by either Genworth or CMHC. Each of these insurers has their own specific lending guidelines and criteria. If using either of them, the common rules defining a second home or vacation property for both are as follows:
- Property must be located anywhere in Canada.
- Property must be intended for occupancy at some point during the year by the borrower, or a relative of the borrower, on a rent-free basis.
- Timeshare interests, fractional ownership, life leases and properties used as rentals or those in rental pools are not eligible.
- The property may or may not have year-round access - depending on the guidelines of the chosen lender/insurer.
As far as qualifying for the mortgage, lenders and insurers require the income of the borrower to service the debt. Should you wish to avoid paying CMHC or Genworth insurance premiums, you may put more than 20% down, but you need to pay for the appraisal and may be required to provide more documentation.
Many programs are available and as mentioned, CMHC and Genworth have their own guidelines if you need to borrow more than 80% of the property value. Each also has certain minimum property and borrower-eligibility requirements. The best thing to do is to contact us in order for us to help you select your best mortgage option for these types of properties.
