Welcome to another episode of Mortgage Mechanics.

We’re here in the beautiful ski Resort of Silver Star Mountain on opening day where the powder is fresh and the air is clear. Have you ever wanted to own your own vacation home but didn’t know where to start?

Owning a vacation home is a dream for many. Whether it is up at the local ski hill, golf course, or lake resort, there are financing policies that can change how you finance your dream vacation home.

If you are a Canadian buyer, you do have a few more options than our International buyers. For one, you have the ability to purchase with a minimum of 5% down under Genworth’s secondary home policy. This allows potential buyers the option of buying without having to put 20% plus down.

There are conditions with this rule – you cannot have another mortgage that is high ratio insured with the same insurer. If you do, then you will be restricted to 20%. And you must be able to qualify without the use of rental income. If you are looking for a vacation rental, then your down payment increases from 5 to 20-25%

If you are an international buyer, your finance options are more restrictive.

Most lenders require a minimum of 35% but depending on your situation we could potentially secure 25%. You also have to be present to sign all legal documents in the presence of a CdN Lawyer and you MUST open a Canadian Bank account. There is no exception to this rule.

It is also important to note that not all vacation properties are financeable. Properties that are age restricted, fractional interests, hotel style condos, and mandatory rental pools are less marketable for a lender. If you are thinking of purchasing this type of property, we do encourage you to seek the advice of a knowledgeable vacation specialist who can provide guidance with the process.

Owning a prime investment such as a recreational property is not for everyone. Taxes are typically higher and you normally have strata or maintenance fees. It’s important to calculate your overall monthly expenses before making this leap. If all these factors have been considered, then your next step is to decide where and what type of property suits your lifestyle.

Whether it’s relaxing by a beach or sipping a hot chocolate by the fire, these aren’t dreams for the select few. Let us help you make your dreams of home ownership a vivid reality.

For more information on vacation properties and how to finance them, check out our blog at karigares.com