How to make the most of your money

Hazard land. It’s the kind of designation that scares off many buyers—and some mortgagers and insurers. But when Sarah Poole and her husband, Chris Bradley, found their dream cottage on Long Point on Lake Erie, they knew they wanted it, scary designation and all.

Like many cottage buyers, Poole and Bradley weren’t exactly cottage hunting when they found it. They were reality-checking the price on a relative’s cottage property that they were considering buying, looking at comparables in the area. A day in the car confirmed their hunch: The property had been overvalued. As they reached the end of the road on Long Point, they started to turn around—and noticed a For Sale sign. It was in front of an 800 sq. ft. three-bedroom cottage built on stilts close to the water, on property labelled “hazard land” by the province. “Basically, it’s at increased risk for damage by the natural elements,” says Poole. That risk isn’t hypothetical: There were once about 100 cottages along this strip, but because of a ferocious storm in the 1980s, there are now only about 40. “You can’t get traditional financing for it. You can never make it bigger,” says Poole. “So we knew we’d better love it.”

“And if you’re on leased land, the mortgage amortization has to be five years less than the term of the lease.” The bottom line: “Generally, the more like a house in the city it is, the easier—and more affordable—your financing is going to be,” says Pamela Valent, a mortgage agent with Mortgage Architects 
in Mississauga.

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