Owner-occupied Vacation Home
As a homeowner, you may be wondering what type of mortgage you need for your vacation home in Ontario. Vacation homes are not treated the same way as your principal residence when applying for a mortgage loan, and a vacation home should be used by you and your family exclusively. An investment property, on the other hand, is intended to be used as an investment tool. The rules governing these types of mortgages are different from those associated with owner-occupied property loans.
While there are many mortgage lenders in Ontario, you will find that competition is very high, making it easier to get the best deal on your mortgage. Keep in mind that the most important thing to do before applying for mortgages is to gather information about various mortgage lenders in Ontario. You can visit the websites of the Canadian Mortgage and Housing Corporation, the National Foundation for Credit Counseling, and the Ontario Mortgage Brokers Association to get the required information. You can also talk to financial experts who can guide you through the process of applying for mortgages.
Mortgage Application Process
If you decide to vacation in your second home in Ontario, it is essential to confirm whether you are eligible for a mortgage loan on it. Vacation property mortgages will require income and credit requirements to support your mortgage application. Make sure to consult with your mortgage broker. Interest rates for vacation homes in Ontario are usually higher. However, if you have well-established credit and net worth, getting a mortgage loan will not be too difficult.
Property Type and Location
Mortgage lenders will require details on the vacation property, especially in the case of cottage properties. Details such as location, year-round usability, road access, potable water source, and heat source will be critical to your application. This information will help them assess potential marketability and risk associated with placing a mortgage on the property.
Vacation Properties with Income
Consult with your tax advisor to fully understand any tax implications of owning an investment-generating property. The tax professional will inform you about the applicable tax deductions you can make for the rental income you receive from your vacation home, helping you save money on the taxes for other expenses such as education or retirement.
Build your net worth with a beautiful asset while providing you and your family the perfect spot to relax and unwind. Cottages and other vacation properties are providing family memories for many average Canadians, who are taking advantage of low rates and innovative new mortgage products that put these getaway homes within reach!