How To Get an Institutional Mortgage On A Seasonal Cottage

“Yes, There Is A Way To Still Get a Great Mortgage Rate on A Seasonal Cottage”

Find and securing cottage mortgage financing can be difficult for many situations, but can be particularly hard at times if you’re trying to get bank mortgage rates on a seasonal cottage property.

In many cases, the seasonal cottage properties will not even be considered by what we would refer to as “A” mortgage lenders and dropping down to a “B” institutional option or even a private mortgage option is going to be more expensive with respect to the interest rate and the long term debt service.

There is a way around this, but you need to be working backwards so to speak from the requirements of the mortgage programs that will consider seasonal cottages in the first place. Too often borrowers believe that if they find that perfect vacation spot that there will be a way for the larger mortgage lenders to fit your potentially unique request into their programs.

Unfortunately, lenders are historically inflexible on changing any of their requirements for a specific type of asset and loan program, so if you don’t fit the box you don’t get funded and may have to settle for a higher interest rate option.

The good news is that there are traditional “A” lenders that will consider seasonal properties under the following two key conditions.

First, the property needs to have running water and septic set up and operational. Second, the borrower needs to be able to qualify for Canada Mortgage and Housing Insurance.

There will be other lesser requirements, but bottom line, you can still get excellent mortgage rates on your vacation property if you figure out your financing approach “before” you start looking at cottages.

The key is to work with a mortgage broker to get pre qualified for an institutional mortgage on a seasonal cottage property in a particular area. That way, you’ll be well versed in what the exact requirements of the financing program are and can use this information as a pre screening tool when looking at properties to buy.

If you’re currently looking for a cottage property, have a one that requires mortgage financing, or are just planning ahead, please give me a call so we can get a plan in place that will get you financed and into your vacation home so you can start enjoying the summer months.

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About the Author Joe Walsh

I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel