Cottage Financing

In the past if you wanted to finance a cottage purchase it was better to take out some of the equity in your city home or finance the purchase on a line of credit.  Recently however, many institutional lenders have eased their lending criteria so that it is now possible to get favourable rates on a recreational property purchase.

The following details are the lending criteria used by ScotiaBank when reviewing a cottage purchase:

Applicants:  Owner use;  not applicable for rental or investment purposes.

Property:

Cottage Type "A"

• minimum 720 sf. above grade with full basement
• minimum 1000 sf. w/o basement
• full foundation
• minimum 1 bedroom
• structurally sound with no major repairs required
• central heating;  potable water;  septic system
• remaining economic life 5 years longer than amortization period
• residential, rural or seasonal zoning
• year round access

Cottage Type "B"

• central heating not required
• seasonal or water access acceptable

Financing:

• up to 95% appraised value or purchase price for Type "A" with insured mortgage
• up to 90% appraised value or purchase price for Type "B" with insured mortgage
• 80% financing for Type "A" or "B" if uninsured mortgage

Down payment required:

• minimum 5% from owners own resources for Type "A"
• minimum 10% down from owners own resources for Type "B"

Term:  up to 7 years

Amortization:  up to 30 years

Please call us at your convenience if you have further questions:

705.645.5257                (office)

705.641.9711                (cell)

rphilp@muskoka.com    (email)

Robert + Mary Jane Philp  |  ROYAL LEPAGE LAKES OF MUSKOKA  |  Bracebridge, ON