Purchasing a home is a large investment and something individuals save up for years to accomplish. However, after many years of homeownership, many individuals in Collingwood are ready to take the next step and purchase a second property. But is this the best choice for your current lifestyle and finances? Here are a few things you should know before you take the plunge and buy a second home.
Determine Why You Want the Property
One of the first decisions you must make is to determine why you want to purchase the second home. Do you want the home as a vacation property? Do you want to flip the property and make some money? Are you looking to use the home as a rental and bring in extra income? A second home can be an excellent investment, as long as you have a plan in mind and know why you want to purchase the home in the first place.
Consider How Much Time and Energy You Have
Homeownership comes with much responsibility. You not only have financial obligations, but you will need the time, money, and energy to complete many maintenance and repair tasks around the property as well. When you have a second home, this will double your workload. Make sure you have the time and energy to commit to maintenance on your second home. If you do not, will your financial situation allow you to hire a professional to tackle all needed repairs?
Look Over Your Finances
How much extra money do you have in your budget each month? Before you consider a second home, you must make sure you can truly afford it. You will want to carefully look over your budget and ensure you have enough money to not only cover your regular living expenses but a second mortgage, utility bills, insurance premiums, and much more. If you have any questions, you may want to discuss your goals with a financial advisor.
You Must Have Ample Savings
When you are in the market for a second home, there are much tighter requirements to qualify for a mortgage. For example, you will need a much larger down payment and a lower debt-to-income ratio than you would with your first home. You will also need a good credit score to qualify. To fully understand what you need and if you do qualify for financing of a second home, talk to local lenders.
If you are in the market for a second home, contact Collingwood real estate agent Christine Smith today. She can help you find a second home that meets your needs.