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(July 10, 2023)

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This mortgage program allows people to purchase an additional home for immediate family members on a rent-free basis. It is a unique qualification program as it is the only product that allows you to purchase another property in which you do not intend to occupy, with a down payment as little as 5%. Typically, if you do not reside in the property that you purchase, the minimum down payment would be 20%.

Common applications of the Second Home Mortgage Program:

-purchasing a property for the purpose of providing accomodation for an adult child who is starting a business

-providing accomodation for an adult child who is attending a college/university (or any other post secondary educational institute).

-Ideal for elderly parents on fixed incomes who lack qualifying income for mortgage qualification

KEY QUALIFICATION GUIDELINES:

up to 2-unit properties (duplex) are allowed, a family member must occupy one of the units on a rent-free basis
remaining economic life of the property must be at least 25 years
property purchase price must be less than $1M
maximum amortization is 25 years
down payments must be derived from own sources, cannot be gifted, or from borrowed sources
immediate family member is defined as any one of the following: father/mother, child, brother, sister, grandparent, legal guardian, or legal dependant
all qualifying applicants including the resident family member will be required to register on the land title
ability to request additional mortgage funds for immediate renovations/improvements to the property are allowed (via the Purchase PLUS Improvement mortgage guideline)
self employed applicants are allowed provided they can qualify as per their declared incomes via Line 150 of their Notice of Assessments

The following criteria are not permitted under the Second Home Mortgage Program:

vacation properties are ineligible
down payment proceeds cannot come from borrowed sources
down payment proceeds cannot be gifted
must be a Canadian citizen (not available to Temporary residents)
property cannot be rented out to generate income, therefore, projected rental income cannot be used for qualification purposes. Applicant must be strong enough to debt-service the entire mortgage (in addition to any other existing mortgages they may hold)

Wondering if you are eligible to qualify for a Second Home mortgage? Call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko.

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