How to get a second mortgage to buy another house (to invest in or move to)


in this video we look at how to buy a
house if you already own another one and what are the mortgage implications?
That’s coming right up. Welcome to Homebuyer’s School brought to you by Brookfield Residential. Hi everyone, welcome to another Homebuyer’s School
video, a channel where you get the latest strategies tactics and tips from home
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below, hit the little notification bell so you don’t miss anything. So today I’m
joined by Mujtaba Syed, manager and mobile mortgage specialist with TD
Canada Trust and the question we’re gonna answer today is can you buy a
house when you already– when you own one already? Yeah absolutely, but it just
depends on your scenario, what you’re looking at doing. Now if you’re trying to
buy a house and you want to sell your home, yes you can definitely do that. You
could go to your lender and you can speak to them and say listen I am actually
–have listed my property or it’s been listed, I have some pending offers this
house is not gonna be sold, I do want to purchase a new one, a lender can actually
factor that in to your qualifications. They could take a look and say okay if
we can get some kind of confirmation or proof that you have sold your house or
there’s a pending offer on it or you will sell your house prior to moving
into your new house, we can actually use that to qualify. That could be just one
scenario. Another scenario is if you decide that hey, you’ve lived in this
house and now you want to turn that into an investment property or just once
turned into a rental property which a lot of people are doing these days,
can you still qualify for a mortgage? Absolutely you can. You could tell the
lender and say listen I am actually planning on renting this mortgage out, I
actually have a future lease in place, I have someone willing to rent this and I
actually want to buy a new house. A lender at that time can look at that
scenario and say listen, can we use the rents to offset the current obligation,
their current mortgage, and would that be able to help you qualify for your
mortgage? It definitely can. So there’s definitely scenarios to take
a look at, you don’t have to sell your home and then buy a new home after, you
can do at the same time. Once again you want to talk to the professionals and
the specialists you’re dealing with at that time which would be your bank, your
lender, your real estate agent, everyone should be able to be on the same page
and they can give you the right advice at that time but definitely
the option’s available, you don’t have to wait, or you you can have more than one
house at a time. What happens to your current mortgage
from the current house? Can you– I don’t think you can
transfer that mortgage, do you actually have to qualify for the new house? Yeah absolutely,
so when it comes down to having your current house right now, all
things have portability built into their mortgages,
so when we call portability, what that just means is that now the we can
actually take your mortgage and actually port it from one property to the other
once you sell that property. Now there’s a benefit to portability, you can
definitely look at doing that if you have a great rate right, if you’ve gotten a
rate at that time when your rates were very low and you’ve got some great terms
on that rate and you want to take that over, you can actually port that mortgage
once you sell your home on to your new home so you can keep that rate.
Portability – there’s also a lot of benefits of portability as well because
like I said, if you are in a fixed-rate and you try to sell your home and you
want to break that term, there’s something called penalties, they’re
called exit penalties, payout penalties and they could be kind of large they could
be depending on what they are at that time. So a portability option
will also save you from paying all your penalties so if you’re gonna sell your
house and you want to be moving into your new house, talk to your lender about
portability. Go to your lender you were dealing with previously or your banker,
or your specialist, and advise them and say listen do I have a portability
option? Can I transfer my mortgage from one property to the other and then work
with them to see what they advise for you to do. Do you– when you’re
planning to buy a new house and you’re planning to port your mortgage over, do
you have to take that stress test or the pre-qualification again or– Absolutely. –You do? Okay. So even if you qualify for a mortgage for a first-time, you’re not a
first-time homebuyer per se, anytime you get a mortgage you do a lending when it
comes on to mortgages or secured lending or what we call it you, have to go through
a stress test it’s because we want to see qualifications, situations could have
changed and now everyone’s subjected to that so it wouldn’t be fair for someone
if they– for a first-time homebuyer at qualifying stress tests on someone who
wasn’t a first-time homebuyer so everyone is on an even playing field,
everyone has to. You could be a first-time home buyer or a tenth time
home buyer, if you want to purchase a new home you have to go through the stress
test, what’s available for everyone today. Okay, now how about if you– let’s say you
inherit a home right, and you already have a mortgage, same thing you still
have to re-qualify for if you want to take that mortgage on? Yeah so that’s– so
those situations can be a little complicated. What I would do– every
scenario is going to be different when it comes down to like inheritance or
being given a house or a gifted house et cetera, it’s all sort of things that you
would want to talk to a specialist about for sure. There might be a stress test here
that might not be– just these are just not normal situations or not normal
scenarios what we call out of the norm, sit down with your lenders, sit down with a
specialist and have the discussion with them to see how your certain scenario
impacts you with the stress test or without the stress test
to see what happens. Let’s say you’re using that second property or your current property and
you’re going to move into the second one as a investment property, is it a good
idea to actually carry two mortgages? Once again it really just depends on
your financial situation on your financial application, if you have a
rental property if you want to turn one of your properties into a rental
property or investment property, you want to see how comfortable you are. There’s
definitely pros and cons of having investments in real estate like any
other investment, there’s important cause to having a rental property so you want
to see to see if it kind of meets with your financial obligations. Maybe sit
down with your financial planner, maybe sit down with someone that can advise
you on that path to see if it makes sense for you– is there a
significant risk for having a rental property or taking on renters that you
could– that you could take on as well. That risk could be extra risk for
you, if someone’s damaging your property or they haven’t paid the rent on time
because that rent– when that mortgage payment is so an obligation on you so
even if someone else doesn’t pay on your behalf you still are– you still have to
pay right, that is a current obligation for yourself so definitely have the
conversation with the financial planner with someone that you feel like can
actually give you the proper advice on having that and then decide for yourself.
I feel like having options is great and always having– real
estate investments is also a good option as well but it might not be
recommended for yourself. Perfect. My question for you is have you ever had– have you owned
another home and tried to apply for a mortgage?
Have you been accepted or declined? Let us know why or why not in the
comment section below. So Mo, do you have anything else to add? No I think I think that’s pretty much it so definitely go in, every scenarios going
to be different, your scenario’s gonna be different, have the conversation with
your lender, have the conversation with your specialist and work out the best
case scenario for yourself. Perfect. Thank you very much for joining us and we’ll catch you next time. That’s another edition of Homebuyer’s School. Tune in next time for more expert tips and tricks, and visit homebuyersschool.ca to bring you one step closer to finding your dream home. As with everything it would be great if you like and share our videos, also please let us know if you have any home buying questions you want us to answer.

11 Replies to “How to get a second mortgage to buy another house (to invest in or move to)

  1. Have you owned another home and tried to apply for a mortgage? Have you been accepted or declined? Remember to watch our other mortgage-related videos in our playlist: https://www.youtube.com/playlist?list=PLTRYbItmaqW-M3CUjHQh9u8AAxvOnabWU

  2. I'm thinking about buying a house to rent out but it's scary to think about the crooked people

  3. I applied for a second mortgage loan, my credit score is good, I'm going to rent my current home. The Leander said the only way I may get the loan was to sell my current home? Is that true?

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