The purchase of a first home is a great achievement, but if you are like many Canadians it is not the last time you will be buying a home and needing a mortgage. If you are in a strong financial position and are looking to purchase a vacation home or a second home, third home, or even tenth home, you will most likely need to apply for another mortgage.
What you need to know is that lenders look at lending towards the purchase or refinancing of a second home or third home differently than they do at your primary residence. If you don’t get the right guidance and choose the right lender, you might find that your mortgages, interest rates, and terms from one property to the next vary quite significantly. Luckily the experts at Clover Mortgage are experienced with helping secure mortgages and loans for vacation homes, second homes, third homes, or even for a purchase of your tenth home.
When purchasing a vacation home, your lender will be interested in knowing the type of property it is, along with some other important information. Vacation homes are usually divided up into two main categories, one that can be accessed year-round and is structurally sound (like a four seasons cottage) and one that can’t be used year-round and has a weaker foundation (like a smaller cabin used for 4 months of the year).
The mortgage options your lender will provide you with depend heavily on the type of vacation property you are looking to purchase. Structurally sound properties that can be used year round are treated much like a primary residence by lenders. At Clover we will ensure that we find the right lender who favours and offers the best options for vacation properties, and we will work hard to secure the best rates and terms for you.
If your new property is in good condition located in a desirable area, then you will have the option to choose between a fixed or variable rate mortgage, a great low interest rate, and the down payment requirements will be similar to that of a residential property. If your second home or vacation home is a smaller, older property in the woods that can only be used for half of the year, many lenders will offer you a mortgage that is quite different than what you might have with your first home. For a less desirable property many lenders will offer higher interest rates and require a larger down payment due to the heightened risk to the lender.
*Rates start as low as 4.49%
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