Achieving the Dream of Owning a Vacation Home
Tags: dream home, Toronto, gta, mortgages, second mortgages,
What’s better than escaping the harsh Canadian winters to your own private villa in Mexico or a beach house in Miami? Or maybe it’s owning a cottage that your family can enjoy on weekends?
Wherever your dream vacation home is located, owning one takes money and a financial plan to achieve. The good news is that you might have options that don’t include winning the lottery or discovering you had a rich uncle.
Can you Fund your Vacation Home with a Loan?
Loans aren’t meant to be used frivolously and while a vacation home can feel like a luxury, it can also be an investment. Properties as assets are historically very secure, so using different loan types to invest in a vacation home could work in your favour.
If you plan on treating a vacation like a second home that will aid in your retirement than borrowing might be an option if you can afford the second mortgage.
Invest in the Proper Research
Scour the web and speak to realtors and travel agents to find an under-the-radar spot to buy a vacation home. You’ll pay less and potentially find an intriguing opportunity to turn a profit.
This might mean Arizona instead of Mexico or a cottage outside of Muskoka, but a bit of sacrifice could result in a vacation home and a sound investment.
Finding the Right Partner
Another option is to co-own a vacation home with another person or family. It could be in a timeshare situation, where you would own under specific circumstances with strangers. Alternatively, you could find the right person in your network to invest in the venture.
Should I Apply for a Second Mortgage?
A second mortgage is a mortgage taken out on a property that is already mortgaged. Using this type of loan to finance a vacation home isn’t uncommon. You could then use a home equity line of credit for any repairs or renovations.
Finding a property for a reasonable price in a desirable area can turn a loan into both a vacation home and an investment.
Even if your savings account isn’t flush, a vacation home can be a reality. Speak with a mortgage expert to review your finances to see if you can make it work.