Cabin Mortgages for Red Deer Clients

 

If you want to get out of Red Deer and into a remote cabin, you’ll find that your Red Deer mortgage broker will have to search to find financing for your new cabin.

Few of us actually live in the cabin full time. This means the property counts as a vacation property or second home. At a minimum, you’ll need 10% down to qualify for a mortgage.

The willingness of the lender to issue a loan depends primarily on the marketability of the property. A piece of property that is accessible year-round is more attractive than one you can only reach part of the year. Property with potable water and heat is more valuable than one without. Homes with a foundation and that don’t require a caretaker to remain habitable long-term are worth more than those that don’t. Properties with full bathrooms and kitchens are far worth more than those that don’t. An outhouse may be a historic relic or backup option for a cabin, but if it is the only option, lenders know they’ll find few takers no matter what price they put on the property. While you could cook over a wood stove in an emergency, no one wants to be forced to do this for every meal. If the property lacks any of these things, you may be able to find a Red Deer mortgage lender, but you’ll probably have to put at least 20% down. Lack two or more of these things, and your down payment will be 35% or more.

Marketability of properties goes up if it is in a recognized vacation area. For example, cabins that are demonstrably close to major recreational amenities like a ski resort may be given leeway despite lacking some key feature. If the cabin is in a known vacation area or on a lake front, you may be able to get a lower interest rate and/or have a lower down payment.

It is possible to secure a mortgage on a cabin with just 10% down, but there are some strict criteria to be met. They include:

• Must have a full kitchen, 3 piece kitchen, common area and bedroom
• Must have a heat source, but it doesn’t have to be permanent – this includes wood stoves, heat blowers, stove or fireplace
• Must have running water but doesn’t have to be potable – leaving open the option of bringing in potable water tanks
• Must have indoor plumbing, but it could be via potable water, chemicals or a holding tank
• Must have a foundation, but a floating foundation like sitting on blocks is OK if that is the norm for the area
• Minimize size of 850 square feet if you want conventional financing
• Cannot finance more than five acres of property along with the cabin
• A maximum total loan amount of $350,000
• Good credit by borrower such as credit score over 680, no prior bankruptcies, no R3 in past two years, no gifted down payment, no third party guarantor except their spouse

 

Seasonal access to the property is acceptable, including access by plowed road or boat, if essential criteria are met.

If you meet those criteria as a borrower and the property meets the requirements above, you may indeed be able to get your dream cabin for only 10% down and a low mortgage rate. Call your Trusted Red Deer Mortgage Broker at Whalen Mortgages to reach one of our dedicated team members to start the process today! We work hard to get our clients approved! 587-315-3525