Rural Mortgage Lending for Diverse Property Types

The big cities may make a lot of noise and attract most of the attention, but the reality is that most of Ontario consists of small towns, rural communities, and endless wilderness.

For mortgage brokers who operate outside of major urban centres, this vast rural market offers a wide range of property types, client needs, and lending scenarios that you’re unlikely to encounter in a city.

In this article, we break down rural mortgage lending for diverse property types and share how Pillar can help you secure flexible mortgages for your clients.

Understanding rural property types

In a city, the residential mortgage market tends to focus on single-family dwellings and multi-unit homes. In the country, things are much more diverse – and interesting! These are just a few of the property types you may encounter in the rural market:

• Cottages & second homes
• Hobby farms & agricultural properties
• Islands & waterfront properties
• Raw land & acreage properties

Fundamentally, helping your client secure a mortgage for one of these property types involves a similar process to what you see in an urban setting. Where you’ll notice a big difference, however, is what lenders are willing to lend on.

Often, lenders will either significantly scale back on the LTV or simply be unwilling to lend if the property has what they label as red flags, such as:

• Well and septic – properties that are not connected to municipal sewer systems
• Off grid – properties that are not connected to the power grid
• Population restrictions – properties in areas with a population below a specific threshold

At Pillar, we don’t see these as red flags; instead, they’re a normal part of our business as Ontario rural mortgage experts.

Flexible rural mortgage solutions

Taking a solution-based approach, we can help you secure residential first mortgages for your clients with up to 80% LTV for purchasing or refinancing rural properties across Ontario. Our flexible lending policies include:

• Mortgages for traditional & non-traditional property types
• Extended amortizations (up to 40 years)
• No minimum beacon
• Flexible payments and terms

We also know that clear communication and efficient processes are important to help you provide the best possible service to your clients. That’s why we provide quick commitment turnarounds within 24–48 hours.

Submit your purchase & refinancing deals

Do you have rural mortgage purchase or refinancing deals ready to go? Submit them to Pillar today via Filogix and we’ll work with you to get them funded.

And as a bonus, every mortgage deal submitted and successfully funded between 1 October and 31 December 2021 will earn you a shot at winning $5,000 in travel vouchers from Pillar. Learn more here.