Keys To Cottage Mortgage Financing
If you’re looking to acquire a cottage and need cottage mortgage financing to complete the purchase, then here are some things to consider.
First of all, cottage mortgage lenders will focus their programs on different regional areas. Cottage markets can be very different one province to another, and even within the larger provincial cottage areas. This is due to the fact that each cottage region is its own distinct market with potentially different resale market dynamics that can impact the lender’s view of the underlying security for the mortgage.
So while you may be looking in a market that provides great deals, it may not have the same amount of mortgage program selection as other areas.
For higher loan to value mortgage financing and low mortgage rates, the cottage property needs to have residential zoning, an electric or gas heating system, and access to all weather roads. The more your target property conforms to what we would characterize as a traditional residential development, the more mortgage programs will be available for you to consider.
So if you’re seeking 95% cottage mortgage financing and prime plus interest rates, then you need to be targeting properties in solid resale markets where the developments are well established and provide year round access and living.
If you’re interested in a more obscure property, say something with a large square footage, sitting on a large acreage with some form of shared access among neighbors, then it becomes even more important that the target property is in a well established market in order to still be able to obtain high leverage and excellent repayment terms.
As you start to drift away from the established markets, your mortgage options can drop dramatically and even though you may be able to lock down a great deal subject to financing, keep in mind that the down payment and cost of financing could both be higher than you anticipated.
While cottage financing tends to be a well serviced mortgage market for the most part, there can still be challenges in getting the mortgage terms and conditions you’re looking for. This is where the help of a mortgage broker can truly be invaluable to you.
If you’re looking to purchase or refinance a cottage or resort property, I suggest that you give me a call so that we can go over your options and determine your best course of action.
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