Investment Properties and Mortgage Financing

If you're interested in purchasing an investment property, you may be wondering the following:

• How much of a down payment do you require?

To purchase an investment property, mortgage lenders usually require a borrower to have at least a 20 per cent down payment. There are other mortgage programs offered through Genworth that allow borrowers to purchase second homes with as little as 5% down, such as second homes and cottage properties. You can learn more about programs with as little as 5% down here.

• Can you use rental income to qualify?

Yes, you can use rental income to qualify for financing. Some lenders allow up to 100 per cent of the property's rental income to be added back to your gross income.

• How much mortgage do you qualify for?

When purchasing a rental or investment property, most lenders will finance up to 80 per cent of the property and up to 95 per cent in the situations discussed above.

• Can you refinance your current home to pull out equity to use as your down payment?

Yes, you can refinance your original mortgage to take out the down payment or equity required to use towards the purchase of your investment property. You can also obtain a home equity line of credit (HELOC) on your principal residence to fund the down payment on your investment property, too.

• Will I have to pay land transfer tax on the purchase of my rental property?​

Yes, land transfer tax will be payable on the purchase of your rental property. If you are purchasing in Toronto, there will be double land transfer tax which includes municipal and provincial tax.

I can help you understand what is required in order to successfully purchase and manage an investment property while at the same time ensuring you obtain the best mortgage rate on the best terms. Give my office a call today to discuss your next purchase at (647) 773-4849

Stay committed to wanting the best mortgage, stay flexible on your approach!"

What should be considered?

• Getting into a longer term which provides more security. 
• Getting a superior interest rate.
• Structuring your mortgage differently.

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