Vacation/Cottage/Home Financing
Thanks to Ina Bourke a residential mortgage manager with TD Canada Trust
for preparing this insiders report to financing your dream of cottage or secondary home ownership. In this exclusive easy to understand no banker double talk report, you'll know exactly how to proceed and who to talk with.
Ina explains in detail the financing options available to you. What you should be aware of when financing cottages. How you could buy with as little as 0% down and more.
If after reading this valuable report you still need help, Ina will
gladly welcome your questions. So let's get started...
You have now reached your financial planning goal of purchasing
a secondary or vacation home. You have been pre-arranged for a
mortgage. Your Real Estate agent has advised your offer to purchase
has been accepted and you're anxiously awaiting your
closing date so you can enjoy the leisure and peacefulness
of cottage life.
But suddenly there are some questions and concerns from your
financial institution and lawyer over seasonal access roads, potable water sample, survey, and septic system. You may be required to increase your down payment and the mortgage interest rate may be higher… WHAT WENT WRONG?
Actually nothing, except that cottage mortgages have different
requirements than residential mortgages. So what are your options?
Lending criteria has changed substantially in the last few years. In the past borrowers were having to come up with at least 25% of their own funds to put towards the property for the down payment. If 25% was not financially feasible for you at that point there was always the option of refinancing you principal residence up to 90% to pay for the cottage or at least allow you to come up with the down payment.
Today, Lending institutions are allowing clients to finance secondary properties up to 100%!! This will allow you to have that waterfront property or secondary home now rather than later. Cottage property can be financed up to 90%.
You may be wondering what the difference is between secondary homes and vacation/cottage property? Well in most cases they are the same but to a lender there are a few distinct characteristics between the two that will allow the lender to decide if they are going to lend up to 100% or 90%.
Secondary Home
· 100% Financing available with a max amortization of 40 years.
· Potable Water.
· Year round road access.
· Permanent foundation.
· Winterized.
· Maximum loan amount: - $600,000.
· Up to two units Maximum.
· Available for purchase and refinance.Vacation/Cottage Property
· 90% Financing available with a max amortization of 25 years.
· Property characteristics same as Secondary Home except
for the following:
· Water source needn't be drinkable.
· Foundation may be floating. For example, sitting on blocks.
· Property need not be winterized.
· May have seasonal access (road not plowed during
winter or only accessible by boat).
· Maximum loan amount: $350,000 (exceptions will be
considered on a case by case basis).
· One unit maximum.
Although, it is sometimes a little more confusing to purchase a
cottage property, by discussing your situation with a qualified mortgage specialist, there is usually a way to complete the purchase.
Just as you would rely upon Realtors like Alan & Linda How who have a knowledge of the area, it would be advisable to utilize local lawyers and mortgage specialists in the area where you are contemplating the purchase.
In this way, the Realtor, Mortgage Specialist, and Lawyer
are all working as a team to help you realize your dream.
For more information, please contact:
Ina Bourke
Manager, Residential Mortgages
TD Canada Trust
Cell – (705) 749-3898
Office/Pager - (866) 767-5446
Email - ina.bourke@td.com