Is a Vacation Home in Your Future?

Congratulations, you’ve decided to buy a cottage! Somewhere you can go with your family to get away from all the everyday stresses.  But, where do you start? Who do you talk to?

Get Pre-Approved

Whether you’re buying a home or a cottage, getting pre-approved is the best place to start.  Consult with a qualified mortgage broker to find out what exactly what you can afford.  They will take into consideration your income(s), and any liabilities, such as other mortgages, personal loans and credit card debt.  They will review your credit history and discuss any areas of concern.  From this, they will be able to assess what you can afford.

Also, depending on your type of cottage, they will be able to advise you on the down payment requirement.  For example, for cottages that are considered year-round properties, a minimum of 5% is required.  For seasonal cottages, a minimum of 10% is required.

Are you able to use the equity in your property to raise the necessary down payment? For cottages, in order to avoid mortgage default insurance, some lenders require a down payment of 35% of the value of the property.  Therefore, if there is equity in the home, a cost effective option may be to refinance or set up a home equity line of credit to avoid the insurance fees.

Work With a Knowledgeable Realtor

Lenders will only lend out money if a cottage is considered marketable.  This means that, as with all real estate properties, Location, Location, Location is very important.  Although your dream cottage may be in the middle of nowhere, a lender may not see it as a good investment and therefore will not lend you the money to purchase the property.  In this situation, you will need to discuss available options to you with your mortgage broker.  For example, do you have enough equity in your home to purchase the cottage in full?

Always keep your mortgage broker informed as to the status of your search, as they may be able to provide you with further insight from the viewpoint of the lenders.  If you would like an introduction to a reputable realtor, let me know as I am fortunate to work with many professionals.

Enjoy Your Cottage

Lastly, and most importantly, enjoy your cottage!   If you partnered with the right professionals, you were successful in purchasing your dream getaway.

If you would like to discuss your mortgage needs for a new or existing mortgage, please do not hesitate to contact me at


Happy Cottaging!