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During Ontario summers, it can feel like the cities empty out as everyone escapes to cottage country. Whether it’s a waterfront home, forest cabin or countryside campground, these types of properties are hugely popular. Despite their popularity, securing mortgage financing for cottages can be a challenge. We highlight some of the special considerations that you need to take into account when helping clients secure mortgages for cottage country.
When a prospective cottage owner sees an unspoiled sandy cove on a lake, they may see the site of their future family lake house. As a mortgage broker, you’re more likely to see the challenges in helping your client secure financing.
Purchasing vacant land and building a cottage in a rural or remote area often requires more planning compared with traditional home construction. For example, if the property does not have water and sewer services, the buyer needs a plan for putting these in place. Also, if the property is hard to reach – for instance, if it’s on an island – extra preparations and money will be needed for construction.
Finding the right lender is also crucial. While banks may hesitate, at Pillar we understand what it takes to make this type of project successful. Using our Pillar Blueprint, we work with borrowers and their brokers to make a detailed plan of how to fund the construction. We lend up to 75% LTV for the cottage and 65% LTV for the land, with an unlimited number of draws during the construction phase.
Cottages and waterfront homes typically require a bit more TLC than other residential properties, so renovations play an important role in maximizing both their comfort and value. These are a few common upgrades:
“Ontarians love to get outdoors and away from the cities, so it’s no surprise that we see lots of interest in mortgages for cottages, waterfront properties and vacant land,” says Cory Thompson, Manager of Business Development and Client Relations at Pillar. “We work with brokers year-round to fund the purchasing, refinancing and renovating of these types of properties.”
To learn about Pillar’s flexible mortgage terms, how they can help secure a mortgage for cottage country, or to discuss a specific deal, contact our team today.