Owning your own home is an incredibly rewarding venture, so much so that some homeowners are chomping at the bit to start the process all over again and purchase a second home. If financially feasible, a second house can offer equity, income, or just a place to get away from the stress of it all. If you’re thinking of buying another property, this one’s for you. We’ve put together a few tips to help get you started on your journey.
Determine Your Why
Who hasn’t dreamed of having a vacation home for the weekends or holidays, a nice cozy place that you can escape to when city-life gets too stressful? Maybe you can even live in that home when you retire or pass it on to your children. Or what about earning disposable income through a rental property? Whatever your reason for wanting to purchase a second house, make sure to start planning. Each purpose will result in a different process, set of perks and potential tax write-offs.
Explore Your Options
As you start researching, you will find that different mortgages are available for investment properties as opposed to vacation homes. This is why choosing a mortgage broker to help you on your house-buying journey will be beneficial. Going through a company like Source Mortgage will allow you to explore all of your borrowing options, with access to large and small lenders. Oftentimes, a high-ratio mortgage is available if you or a family member plan on living in the home on a rent-free basis. Keep in mind, however, that while the Canadian Home Buyers Plan for using RRSPs is not possible on a second property, you will experience many of the same costs as your first purchase. Expect valuation fees and legal fees among these.
Start Planning Your How
You’ve saved up for a downpayment before, you can absolutely do it again. Use your first home-buying experience as a learning opportunity. What worked for you? What didn’t? Was your original budget realistic? Consider all of these factors when planning your second purchase. Not only will you be managing your regular day-to-day costs, but you will be adding on more financial responsibility. Is double the property taxes, insurance, and repairs a reasonable feat for your bank account? Consulting a mortgage expert will help you determine these incredibly important answers.
For some homeowners, buying a second house can be an exciting possibility. Get started on the right foot and contact Source Mortgage today!