What To Expect When Buying a Second Home

November 10, 2022

“One house, two house, three house, four!”

The excitement of buying a new home never gets old. Even as seasoned realtors, we still have that moment, where we too enjoy what we call “The Shirriff Wells Feeling.” It’s that really warm, fuzzy feeling where you have butterflies in your tummy because you are over the moon with your new home knowing your realtor made it all SO easy.

Are you thinking about buying a second home? Whether you’re buying a vacation home up north, a Toronto condo for your adult children, or an investment property, we have the 411 (or should we say the “416”) when it comes to purchasing the property you’ve been hunting for. These are just a few things that should be on your radar in the early stages of buying that second property, and if you have any questions feel free to give us a call. As we’ve said before, we’re seasoned real estate professionals here to help make your real estate adventure fun, prosperous, and easy.

Getting pre-approved for a mortgage when buying a second home is a bit different.

You’ve been down this road before, so you have more insight than a first-time home buyer… but buying a second property can bring its own unique challenges to your home-buying journey. That’s why we are here to help you navigate the process seamlessly, and we will ensure you arrive comfortably across the finish line with your keys in hand. A lot has likely changed since you bought your first home. You most likely went from renting to paying mortgage payments for the first time after you found the home you would call your very own. The mortgage pre-approval process is the same; however, the lenders now must verify that you can afford another mortgage payment and the bills that go along with it on top of the mortgage you already have. The first step in the process is to connect you with one of our awesome mortgage professionals who will work with you to decide on the best types of products and rates available to meet your needs.

Sourcing for your down payment on your second home has a few options.

You can tap into your previous home’s equity to fund the down payment. As a line of credit, a HELOC (home equity line of credit) allows for flexibility around borrowing and repaying the money, but still counts toward your debt-to-income ratio. In its simplest form, a HELOC works somewhat like a credit card. You can borrow money up to a credit limit set by the lender and then pay back the borrowed amounts, along with the interest owed of course.

You could also pull funds from your RRSPs to put towards your down payment, or if you inherited a large sum of cash recently, using it as a down payment would be a solid investment in your future.

Know where you want to purchase your second property and investigate those neighbourhoods before buying.

It all depends on the type of property you’re looking for, but exploring a neighbourhood before buying will tell you whether the neighbourhood has the right amenities and features that you’re looking for to make the property a worthwhile investment. If you’re planning on buying in and around the GTA, we know all about Toronto’s neighbourhoods and the surrounding areas and can help you choose the best one for your investment. It’s also important to factor in things like schools and transit, and consider how these factors may affect the future value of both the property and its income potential.

If you plan on buying a vacation home or foreign property, we can help with that too, whether it’s in Toronto, Muskoka, or on a tropical beach!

If you plan on buying a second home as an investment property, read this blog for more information on the legal requirements you will need to know about before getting started.

When you’re ready to find your dream second (or third, or fourth) home, contact Shirriff Wells Real Estate at 416-495-2746! We will help you get that “Shirriff Wells Feeling” and, we’ll make it as easy as possible.