by Jay Kingsbury
Across Ontario the recreational property market continues to go through roof. Industry experts predict another year in which buyers seeking a property may outnumber the recreational properties available.
The boomers are in the peak income years and are enjoying the increase of equity and the pay down of their primary homes. Across Ontario they are searching the lakes for the perfect getaway.
Today, recreational cottage markets are gaining a stunning increase in tear downs and renovations – as the old rustic cottages give way to luxury accommodations. Many of the traditional-style cottages are still standing and they sell for top dollar on the occasions that they come on the market.
More and more the average Canadian has cottage fever: they’re looking for a recreational property both as an investment and an enhancement to their own lifestyles. And for many, the goal is achievable due to the fact of historically low mortgage rates – and greater affordability for ordinary families.
Financing a recreational property is more challenging than a principal residence. Traditional lending institutions find second homes a much less desirable investment. Families are often advised to take out an equity loan or a second mortgage on their principal residence in order to buy their cottage property.
The lending landscape has been changing over the past few years. Some lenders have developed flexible new mortgage products and policies that are specifically designed for the cottage and recreational property market.
Families who are longing for that cottage may now be able to bypass conventional lending criteria – opening the door to cottage ownership much sooner than they imagined.
Cottage mortgages are available for owner-occupied second properties, including winterized and non-winterized, with as little as 10 per cent down for purchasers.
Typically, the cottage property needs to be located in a known vacation area, have approved plumbing, and year round access.
Do your homework. In today’s heated cottage market, some families have an edge in the marketplace being cash buyers.
To level the playing field, buyers who are financing their purchase may want to consider talking to a professional to determine approximately how much they qualify for before launching their search.
For some, a cottage is an attractive investment, with rentals providing an extra income stream. But the allure is usually more emotional: a cottage often becomes a symbolic center for family life, where families come together at all ages and stages in their lives to share common activities and traditions.
If you’re dreaming of your own cottage, begin with a conversation with a mortgage professional. Your own getaway could be closer than you think!
Contact Jay Kingsbury Cottage Mortgage Genius