Purchasing a Second Home may seem like a pipe dream to some of us, but you may be surprised to learn what the down payment requirements are for an additional property. You may also have untapped equity in your primary home that could be utilized to purchase a rental property as an investment. Check out this short video to find out what kinds of down payments are required for different types of secondary home purchases.
Here is the transcript:
BRENDAN – Hi, it’s Brendan at RE/MAX Kelowna here, and I’m joined by Jewels Ferris, mortgage broker at Canadian Mortgage Experts. So now in the Okanagan, we have people that are coming here looking at secondary residences, recreational properties, whether it’s up at Big White, or a condo downtown, or it might even be a waterfront home. What is the requirement for down payment when you’re buying a secondary residence?
JEWELS – Yeah, so for a secondary residence, you can do it with as little as 5% down.
BRENDAN – Awesome, so then, so they put their 5% down, they obviously need to debt service the rest of the property and to be able to qualify to buy it. Now what happens if their, you know, their plan is they’re gonna come out here for the summers and maybe rent the property out for part of the year. Are you able to use some of that rental income?
JEWELS – So no, we wouldn’t be able to use rental income to qualify them in that situation. If we needed rental income to help them to qualify, it would then become a rental property, and we require a 20% down payment.
BRENDAN – Okay, so that’s great, so somebody can come out to the Okanagan, buy a secondary home for their family, with as low as 5% down.
JEWELS – Yes.
BRENDAN – That’s amazing.
For all your Mortgage needs, you can reach out to Jewels at: Jewels Ferris – CME (250)826-2873 firstname.lastname@example.org