Does every family you know own a lake cabin, except for you? Do your co-workers return refreshed after a weekend at the lake? Isn’t it time for you to give your family its own special vacation home?
Mortgages for vacation homes in Alberta are easier to attain when you work with Edmonton mortgage broker Advantage Mortgage – we have access to multiple mortgage lenders, offering you more ways to get approved.
We will discuss qualifying for a mortgage for vacation or second homes. Hopefully, after gathering this information, you can decide if a mortgage for a second home is right for you.
Relax, Unwind & Refresh on Vacation
Holidays spent as children make up some of the best memories of life. For some families, vacation is the only time they see each other, all in one place.
“All work and no play make Jack a dull boy.”
You might have taken traditional vacations to a hotel, but realized that this was just too expensive. When you own a vacation home, you can relax and unwind in your own bed. You know the linen sheets are clean and you can decorate, as you please.
Plus, with all of the modern technology – “Who really needs to take a vacation far away?” You can get all your information from cable or satellite 24/7/365. Add a hot tub, sauna and pool – with a vacation home; you have all that you need.
Beautiful Alberta Scenery
There is so much great scenery in Alberta, you might not have time to take pictures during a busy work week. With a holiday home, you can enjoy some of the local destinations, such as the Saint Albert Botanic Park. These botanical gardens are always changing their flowers for different seasons – they even allow you to rent out space for weddings.
Second Home Advantages
Is there a location in Alberta that you simply love as your dream getaway? Why not purchase a vacation home there? A second home gives you more dwelling and hosting options.
You could use a second home to care for your elderly parents. A second residence could be used for dwelling while remodelling your primary residence.
You can also entertain business clients at a vacation home. You can use your second home for important family events, like weddings too.
Adding a Holiday Home to Your Estate
Mortgages for vacation homes in Alberta can also be used for investment purposes. Land is one of the best assets for a family estate. Why not invest in a holiday home for your retirement?
Is qualifying for a mortgage on your second home the same as your primary home? What is included in the Total Qualification Budget? How much is the down payment? We shall address these issues and more to help you make the best lake home financing decision.
Vacation Home Qualification Budget
Some brokers might allow you to use the home equity in your primary residence as part of your Total Qualification Budget for a second home. Owning a primary family home shows you are creditworthy.
Can I Rent Out My Vacation Home?
Many Canadians rent out their cottages, villas and holiday homes during the off-season for supplemental income. Are rental holiday properties treated the same as holiday homes?
While many Canadians are doing this, the mortgage terms are slightly different for rental properties. For example, while a holiday home might only require a 5% down payment, a rental property might require a 20% down payment.
Differences Between Second & Vacation Homes
One of the most important factors for Canadian vacation homes is based on seasonal occupancy. Can you live in your vacation home for all four seasons or only three seasons? What is the difference between a Second Home (Type A Property) and Vacation Home (Type B Property)? Each has its own qualifying rules.
Second Home (Type A Property)
Technically, a second home has all of the same attributes as your first home. You can live in your first home during the winter, right? Then, for a property to be a second home, it also must be a year-round property.
Your second home (also referred to as a Type A Property) must be winterized. It must have heating and full-year access with roads plowed during the winter.
Vacation Home (Type B Property)
Vacation homes are usually inhabited during the summer, so they are seen as being seasonal. These are referred to as three-season homes or Type B Properties. They might lack standard residential heating systems and have inaccessible roads during the winter.
Owner Occupancy
Who will be the primary occupant of your property? An Edmonton mortgage broker will treat an owner-occupied home differently than others. An owner-occupied second family home can qualify for a 5% down payment if the family member is a child or parent.
Building Second Home
Building a second home might be listed under Construction Build. There is also something called a Purchase Plus Improvements (also known as a Fixer Upper). These both might only require a 5% down payment.
Vacation Home Down Payment
Those with the best credit and income might only need to place a 5% down payment on a second home. Income can be from work or gifts. Here is the sliding scale for down payments:
- Second Home or Four-Season Vacation Home = 5%
- Three-Season Vacation Home = 10%
- Rental Property = 20%
The Type A Property might only require a 5% down payment. The Type B Property might require a 10% down payment.
It is also important to note that down payments below 20% are categorized as insured mortgages. You may be required to purchase mortgage insurance.
Fun Family Holiday Home
During the initial consultation, we don’t pull up your credit score, so you don’t need to worry. We will only access your credit score if you give us written consent. We respect your privacy.
In the long run, you can save money on your own vacation home. You also can decorate it how you see fit. Some owners will even rent their vacation homes out for additional income.
At Advantage Mortgage, we have the flexibility to help you find the ideal vacation home financing. You can select the most suitable finance package from our network of multiple Edmonton mortgage lenders.
Wouldn’t a lake home in the family estate be great? ‘Tis the season for vacation homes with the help of Edmonton Mortgage Broker, Advantage Mortgage.
You only live once, so enjoy your time at the lake.