Financing cottages in Ontario

Cottages, sometimes referred to as second homes or summer houses, are often very special places that are passed down from generation to generation while creating lifelong memories. There are two types of cottages, and the type of cottage you choose can affect the type of mortgage you need.

Type A cottage: A winter house with year-round cottages, permanent heat sources and drinking water is set up on a permanent foundation under the frost line. Type A cottages can be mortgaged similar to permanent resident mortgages, have a minimum down payment of 5%, fixed and variable conditions, and are eligible for refinancing once equity is built.

Type B cottage: Seasonally accessible cottages, often without a permanent heat source, on floating foundations (concrete blocks or stakes). Type B cottages can be mortgaged, but usually require a down payment of 10% or more.

Get a mortgage
Most financial institutions offer lending programs for cottages and second houses. Depending on the type of property, you may be able to raise up to 95% of its value. Your main residence is a good place to look for cottage funding. For example, if you build a certain degree of fairness at home, you may be able to use that available fairness to reach your goals. Depending on the amount of equity you have built, you can borrow up to 80% of the value of your home to finance the purchase of your cottage.

If owning a paradise away from urban life is on your wish list, you need to discuss with me the relevant financial solutions that will help you realize that dream.
Elaine Carter, http://www.elainecarter.ca

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