Buying a cottage or secondary property can be a great way to escape from the everyday, or it can be a way to help a family member buy their first home.

Perhaps you’ve always wanted a summer retreat, or a pied-a-terre in the big city. Maybe one of your children, or another family member, isn’t able to manage a mortgage on their own and needs some help. There are countless reasons to purchase a second property.

Benefits of Buying A Cottage or Secondary Property

There are plenty of good reasons to purchase an a cottage or secondary property. A second property can help you:

1. Escape the everyday

Whether it’s a beautiful cottage by a lake or a condo in the city, you can get away from your routine and stay at a place of your own. No more busy, impersonal hotels that cost an arm and a leg. You can have your own private space available whenever you choose.

These days, the cost of residence or shared housing is through the roof. If your child is heading away to school, consider buying a condo or smaller home instead of throwing away money for a costly rental unit or student residence.

Purchasing a place for your child to live for a few years means that they will have safe and reliable housing — and when their schooling is completed, you can sell the property and recoup your investment.

2. Support a child attending post-secondary education

3. Help a family member acquire a home when they don’t qualify

Whether it’s a child, a parent, or a family member, purchasing a secondary home can provide them with a place to live when they don’t qualify for a mortgage themselves.

Relatives, young and old alike, often face challenges when trying to acquire a mortgage if they have reduced incomes. Buying a secondary home is a wonderful way to help them stay in their own place.

Do I Qualify for a Mortgage for a Second Property?

Whether you qualify for a second mortgage will depend on the type of mortgage that you are looking for.

Regardless of the situation, you will want to have a good credit rating, a steady income, and equity. The more equity you have the better, as it will decrease the risk to your lender. The higher your credit rating the better, as it can assist with receiving lower interest rates.

What is a HELOC?

A HELOC is a Home Equity Line of Credit. This is a loan where the borrower will use their home equity as collateral, in order to borrow funds to an agreed upon maximum amount based on the appraised value of the home.

A HELOC differs from a home equity loan, as it only allows for the borrower to receive funds against a line of credit and they cannot receive the entire funds in a lump sum upfront. The regulations regarding HELOCs are frequently updated, so be sure to check with your mortgage broker for the latest details.

How Fran Can Help

“Getting away from the daily grind is wonderful, and having your own personal space to get away to is amazing. I have several clients who regularly tell me that they wish they had purchased their second property sooner.”

Purchasing a cottage or secondary property offers many possibilities and benefits, whether it’s for you or for a loved one. You want to work with someone who will help you understand the best options, so you can make the right choices. Fran will help you get the best mortgage for your secondary property needs.