And while the basic process of applying for and qualifying for a mortgage are the same, lenders will look at many more variables when assessing a property before lending money to buy a cottage.

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while your strength as a borrower is important, banks will also take a close look at the property being acquired when determining how much they are willing to lend.

Application Process

“Private Lenders will look at the location, proximity to a major market, sometimes is it on a big lake, is it on a small lake, access to the property, year-around is best, paved roads is a plus,

“Lenders will want to ensure that there’s a safe and consistent water source as this can sometimes materially impact the marketability and value of the cottage.”

most lenders want a cottage to be a four-season property if they are going to loan you money,

“It is difficult to get financing if you can only access the cottage by water,

“The property has to be marketable.”

CMHC changed its rules last year so that it would no longer insure mortgages on second homes. That means you’ll have to go with a private mortgage company which can provide the necessary coverage if your lender requires it due to the size of your down payment.

Depending on your situation, you could also consider refinancing your home or using a home equity line of credit if you have paid off enough of it to use it to borrow the cash you need.

it is not uncommon for buyers to use a combination of financing through their home and the vacation property to make the purchase.

However, if you only made a small down payment on your home when you bought it and haven’t owned it for very long, you may not have the room you need to finance your new purchase.

it’s important to make sure the decision to buy a cottage fits within your overall financial plan.

“It is a decision that really does require very thoughtful planning,” “It is so important to understand the broader implications of the purchase of a vacation property as it relates to your other goals.”

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