You can afford a second home, let us show you how!
Now that low interest Canadian mortgage rates are readily available, it seems like the perfect time to invest in a second home. Here’s what you should know before purchasing a second property.
Things to Learn About Before Buying a Second Home
1) Do your research.
You will need to resist the urge to buy a home because you want a getaway. Research the properties, area, and low mortgage rate options beforehand. This is an investment, not just a vacation.
2) Think long-term.
Take into account the style of home that would suit your family’s needs. You should consider proximity and what you plan to do while you’re there.
3) Visit the area.
Have a look at the area when it’s off-season and put in the time to speak with the people who live there year round. This will help you get a better understanding of the neighborhood.
4) Determine the style of home.
A home requires maintenance regularly, whereas a condo requires that you pay another person to look after it.
5) Shop around for the best mortgage rate.
Your objective should not be loyalty to your bank, but rather getting the most suitable deal.
6) Calculate the extra expenses.
From insurance and maintenance to taxes and repairs, you must consider the additional costs.
7) Consider sharing ownership.
Speak with your siblings, friends, and coworkers. Sharing a vacation property could help create a more feasible investment. Just be careful; mixing business with personal relationship may be difficult. Be certain that you aren’t casual about the deal and compose formal contracts.
8) Make the most of tax benefits.
Did you know you don’t have to pay taxes on rental income if your home is only rented out for no more than 15 days a year? Speak with your bank to get more information about tax loopholes concerning your new property.
There are no silly questions.
Listed below are a variety of questions to think about when speaking to your mortgage broker:
How long have you been working in the mortgage industry?
Years of experience is essential when it pertains to taking care of challenging mortgages.
What type of education or licensing do you have?
You need to confirm that your mortgage broker is licensed by consulting the Canadian Association of Accredited Mortgage Professionals.
On what do you base your suggestions?
You should make sure that they are providing recommendations for the right reasons. A mortgage broker works for you, and nobody else.
Are there any special conditions that apply to this deal?
Bear in mind any undisclosed costs or unfavorable conditions attached to a no-frills low mortgage rate.
What fees/costs are connected with the rate you have estimated me?
Do not let concealed costs creep up on you. Regularly ask your mortgage broker to break out any charges and fees so you are appropriately notified.
Can I please see the lender’s letter of commitment?
If you are assured a certain rate, be sure to request a letter from the lender verifying that the reviewed rate is undoubtedly locked in.
What is your area of expertise?
Brokers typically facilitate more loans of one form than another. If you are} purchasing a home, make certain you are dealing with a residential expert.
Are you affiliated with any mortgage associations?
Membership to some mortgage associations can possibly be a sign of the broker’s oath to provide} the best Canadian mortgage rate available.
Can you provide me with references?
Ask for names of current clients or real estate agents with whom they have actually worked.
A combination of extensive research and appropriate inquiry should certainly assist you to narrow down your pool of prospective mortgage brokers for the best mortgage rate.
Plan for these unanticipated costs when creating your budget.
A number of first time homebuyers are often shocked when they see the total cost of their home purchase, including the additional expenses, on closing day. Here’s a list of a few of the “hidden” expenditures you should expect to pay.
Despite the fact that most lenders may agree to the existing property survey, depending on when it was last conducted, it might be necessary to have another survey completed.
The majority of lenders will request a home inspection, but even if they don’t, it’s worth the peace of mind to obtain another one.
If you are applying for a high-ratio Canadian mortgage rate (with a down payment of less than 20 % of the purchase price), your lender will require you to purchase mortgage default insurance. While mortgage default insurance provides protection for the lender, you may wish to consider the mortgage rate life insurance for your own protection.
Your lawyer will do a title search, register and prepare your low mortgage rate, and prepare the title deed.
Land transfer tax must be paid by everyone who purchases property in Canada.
HST (harmonized sales tax)
HST was put into effect in July of 2010 in Ontario and British Columbia, HST (Harmonized Sales Tax) is applied to the purchase price of all new homes.
Your lender will only lend you a percentage of either the appraised market value of your home, or the home’s purchase price– often, the lesser of the two.
Unsure of how these additional costs will impact your home purchase? A mortgage broker can help. Contact a FamilyLending.ca mortgage specialist today.
Who should you consult for your mortgage pre-approval?
Handle your mortgage like every other major purchase– that is, be sure you make the effort to compare rates and shop around. Not every Canadian mortgage rate is the same.
When you visit a bank, it’s worth bearing in mind that their loan officers are paid to sell you their products. They will do whatever is required of them to keep you from considering other options.
A mortgage broker is a self-employed agent who works only for you. They are qualified professionals that will help you find the most effective mortgage rate for your unique situation. They compare products from a variety of banks and specialty lenders, and arrange the best low mortgage rate for your needs. The broker works for you, the customer, and most importantly, they are completely free. The lenders pay brokers once they close the mortgage deal.
More Reasons Why Mortgage Brokers Are a Great Choice
- Protect Your Credit Score
- Brokers help to protect your credit rating by only pulling one credit report and using it for all lenders.
- Give You Expert Information
- Mortgage brokers are always up-to-date on the best mortgage rate information.
- Save You Money
- A good mortgage broker can offer tips on how to save money on interest while managing to keep your low mortgage rate payments reasonably priced.
Bank vs. Broker
Which ones suits your needs better– bank or broker?
Types of Mortgages
There are a variety of different kinds of mortgage products available on the market. Typically, mortgages fall under one of the following three categories, open, closed or convertible. A mortgage broker will help you understand the various options.
Make your mortgage hunt less troublesome– contact a mortgage broker today.