As the summer heats up, we get a lot of requests for cabin or vacation home financing. Often these properties will be categorized into "type A" or type B" in order to determine the available options for mortgages.

Sagen has a great program which many lenders also use. FULL INFORMATION HERE. Here are the highlights:

• Max loan amount is $350K
  
• Max amortization is 25 years
• There are higher default insurance premiums added to the mortgage
• Credit: No prior bankruptcy or judgments. No R3's in the last 24months. Minimum credit bureau score of 680 is required for all applicants
• Down payment: Must be from own resources and may include personal savings, RRSP withdrawal, existing home equity, and/or proceeds from sale of property.
• Maximum of one Sagen insured vacation property per applicant.
• No 3rd party guarantors for qualification purposes. Spousal guarantors are permitted

Property:

• Foundation should be permanent and installed beyond the frost line. This includes concrete / concrete block or preserved wood foundations, or post / pier foundations on solid bedrock. Foundation may be floating (for example, sitting on blocks).
• Must be zoned and used as residential, rural, or seasonal. Mixed uses or rental pooling is not accepted.
• Freehold or condominium title. Co-ops or interest ownership is not accepted
• At minimum, property must have a kitchen, 3 piece bathroom, bedroom, and common area.
• The remaining economic life must be at least 25 years.
• Seasonal road use is acceptable. This means the road does not have to be ploughed during the winter. Property may be accessible only by boat.
• Property must be winterized however no permanent heat source is required. For example, a wood stove, fireplace, stove or heat blower is acceptable.
• Good quality construction with no signs of deferred maintenance. There must be good market appeal in the area with no adverse influences / neighborhood nuisances.
• Water source: well, municipal serviced, and cistern. Lake or river water is acceptable. Water source needn't be drinkable. However, there must be running water in the home.
• Property must have electrical power. Alternative energy sources may be considered on a case-by-case basis such as solar power, wind energy and generators.
• Property must have sewage disposal. Holding tanks may be considered provided it is common for the immediate area and meets all municipal/provincial requirements (e.g., CSA approved holding tank).

Most rural properties will require 25-50% down payment so it is important to ensure clients are aware of the amount required up front. For qualification and/or mortgage payment calculators - check out our resource page here: MORTGAGE CALCULATORS.