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About 1 out of 3 people who purchase a second home use it as an income-producing property and rent it out. A lender can deduct the rental income from your total monthly debt payments and decrease your monthly debt per month thus increasing the amount you can afford to purchase. Talk to one of our mortgage brokers today to discuss your best options!
As of May 30, 2014 CMHC no longer offers is Second Home Insurance program. If your current home is CMHC insured and you have more than 20% equity, talk to your mortgage broker about having the insurance removed so you can purchase a second home with CMHC insurance. There are other lender insurers your mortgage broker can use like Canada Guaranty and Genworth but their programs dont always fit your mortgage needs when purchasing a second home.
There are many different mortgage products for purchasing a second home. In speaking with your mortgage professional, they will help you decide on the best mortgage for your needs. When qualifying for a vacation home financing, the lender will add the new mortgage payment amount onto your total monthly debt payments. If those do not exceed 42% of total monthly household income, the loan will most likely be approved.