Pre construction condos scarborough . The epidemic has made holiday homes popular
Pre construction condos scarborough . The epidemic has made holiday homes popular. During the outbreak, many citizens bought a second home as a holiday home in order to escape the virus and flee the city, and there are still many potential buyers following suit.
However, experts warn that the process of holiday real estate loans is different from that of ordinary homes, in which lenders consider more than the creditworthiness of buyers. According to a report released by Re/Max in May, 59 per cent of people planning to buy leisure property next year are experimenting with the property sector for the first time.
While the company’s 2021 leisure property report said prices were rising, 22 per cent of respondents said lower interest rates had increased people’s ability to buy homes.
Donna Murphy, a mortgage broker at TGM The mortgage Group, says it is important to work with real estate agents who are familiar with leisure real estate. “make sure your partner knows what you’re looking for and what your short-and long-term goals are.” If the buyer does not have the cash to buy the holiday property directly, they can choose a mortgage loan, or they can cash out the second mortgage of the existing house, which is a combination of the two.
In general, other things being equal, the more similar the properties of a vacation property to an ordinary home, the easier it is to get a mortgage, such as convenience, protection from the cold and access to water, Mr. Murphy said.
Toma Sojonky, a mortgage broker in Westwin, British Columbia, says it is sometimes easier to remortgage his home than to get a loan directly for a vacation property. ‘There are still many inherent nuances between recreational real estate and ordinary detached houses, which makes it difficult or impossible to apply for loans directly,’he said.
Each situation is unique, Ms. Murphy said, but she estimates that, on average, changes in mortgage stress test rules in June reduced the maximum amount of mortgages that borrowers can apply for by about 5%. This amount could have an impact on a hot market. Murphy added that buyers who do not meet the new stress test rules have other options, such as considering borrowing from other lenders, but it is best to be prepared, which will pay a little more interest than banks.