Many people in Canada are doing well enough in their jobs that they can afford to purchase more than one property. Therefore in addition to their current townhouse they look for a vacation home in nice areas to buy their second property. While many Canadians like to buy their vacation home within driving distance of their first home, some succumb to the allure of tropical islands or fascinating cultural destinations and search for their home in another country. Here are some things you need to know if you're going to do this.
Unless you've got a large sum of money sitting unused in your bank account, you will have to take out a second mortgage for your second home just like you did for your first home. But getting a mortgage in Ontario is not the same as getting a mortgage in the Cayman Islands or Spain or Thailand. Each country has it's own terms and rules and you must be familiar with them before you agree to anything. It is beyond the scope of this article to lay out mortgage advice for each country you might visit, but we can give you some general advice.
First of all, it's worthwhile to check with your current lender to see if they will finance your overseas purchase as well. Many domestic lenders have provisions for customers who are purchasing property overseas, but you will usually need to be living primarily in your real estate in order to do this. The advantage here is that you will be paying your mortgage in the same currency as your income.
Another option when financing your second home is to use local mortgage lenders. You should be very careful when shopping for mortgages in another country you're not familiar with, though. Hire a trustworthy broker that was recommended by other Canadians so you can avoid being fleeced. Foreign mortgages are a good idea if you think you might want to put up your property for sale and move overseas eventually. But you'll be paying in local currency, not in Canadian dollars.
A third option you might consider when buying property overseas is to use an international mortgage lender (much like this one). These lenders specialize in mortgages for people who are not native to the country they're buying real estate in. You might have to pay some extra fees, but it could be worth it if there's no one you can deal with locally who speaks English. Ask your real estate agents to recommend someone. This website is compliments of our sponsors such as the Housemaster home inspection company of Savannah, GA