Home Staging & Real Estate

Financing A Cottage In Ontario

Sometimes called a second home or summer house, cottages often become a very special place passed on through generations, while making lifelong memories along the way. There are two types of cottages and the type of cottage you choose can affect the type of mortgage you need.

Type A Cottages: A cottage with year-round access, a winterized home with a permanent heat source and potable running water set on a permanent foundation below frost line. Type A cottages can be mortgaged similar to mortgaging a permanent residence, minimum 5% down payment, fixed and variable terms with eligibility to refinance once equity has built up.

Type B Cottages: A cottage with seasonal access, often with no permanent heat source and sitting on a floating foundation (concrete blocks or pilings). Type B cottages can be mortgaged but generally require a 10% or larger down payment.


Getting a Mortgage
Most financial institutions offer financing programs for cottages or second homes. Depending on the type of property, you may be eligible to obtain financing for up to 95% of its value. Your primary residence is a good place to look for financing for a cottage. For example, if you’ve built up some equity in your home, you may be able to utilize that available equity to achieve your goals. Depending on the amount of equity you have built up, you can borrow up to 80% of the value of your home to finance the purchase of your cottage.

If owning a piece of paradise away from city life is on your wish list, you should talk with me for relevant financial solutions to help make that dream come true.
Elaine Carter, http://www.elainecarter.ca

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