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