IT’S NOW OR NEVER FOR VACATION/SECOND HOME FINANCING WITH 5% DOWN!
CMHC recently announced it is eliminating vacation and second home financing at the end of May, shutting down access to buying a second home, cottage or homes/condos for children attending post-secondary institutions in other cities.
Starting June 1st, a minimum 20% down payment will be required to purchase such properties.
This program has provided a tremendous opportunity over the years for home owners to purchase a second property that eventually can become a rental/investment/income property, since after one year of occupancy the owner/borrower can do whatever they want. In other words it can be turned into a rental property for arm’s length/third party use, thus adding to one’s real estate portfolio.
It represents the last ‘Easy’ way to acquire a second property with a minimal down payment AND AT THE LOWEST RATES available, not the surcharged rates that apply to ‘rental’ properties when 20% down is required.
If you have any thought of buying a cottage or purchasing a property for your children to live in (to defray educational costs) while they attending college or university, ‘IT’S NOW OR NEVER’ folks, to be able to do so with minimum down AND AT DEEP DISCOUNTED RATES.
The mortgage payment for example of a property purchased at $250,000 with 5% down or $12,500 at 2.99% today is $1,123 per month whereas after May 31st with 20% down or $50,000 down with the full market (surcharged) rate of 3.49% is $997 per month. While the payment is $126 less you must invest an additional $37,500 of your own money versus $12,500.
Get this. The total amount of interest paid over the amortization for the 5% down vs 20% down scenario is $99,322 versus $99,245 or almost identical. So you pay the same total interest either way but the return on your investment will be much higher with the 5% down scenario. For example if the property value increases say $75,000 divided by your investment of $12,500 the ROI return is 600% whereas the same $75,000 divided by your investment of $50,000 is only 150% while paying the same total interest. This is the power of ‘leveraging’ which will disappear by June 1st.
So act now and call us today to take advantage of this last great mortgage financing loop hole and create wealth for your future.