Can I still buy a second home with 5% down?
After the great feedback we got from our last blog post on Purchase Plus improvement Mortgages, I thought we should discuss another great program that CMHC told us about when it was at our sales meeting last week. One of the other major drastic changes that the federal government has made to protect the real estate industry was to eliminate financing of investment properties with little or no money down. The new requirements for an investment property are that it must be purchased with a 20% down payment. This helped to limit the amount of speculation in the market and prevented false demand.
Home owners are, however, allowed to purchase a second PRINCIPLE residence with 5% down. It is important to know the difference between a principle residence and an investment property. This home cannot be rented for money (this would be considered an investment property).
This mortgage program is especially useful for people looking to buy Nanaimo real estate for retirement or recreational property or for their children attending Vancouver Island University. They will still need to qualify for the financing as usual to show that they can service the debt but this program will allow them to keep a larger portion of their capital or the equity from their first home.
In an effort to be your first choice when looking a Nanaimo Realtor, we try our best to stay on top of unique options for both home buyer and sellers in the Nanaimo real estate market. If you have any questions or comments, please feel free to post them below.