Can I get a mortgage on a rural BC lot, acreage or cabin?

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Usually, for a home lived in year-round with year-round access; with under 20% down, CMHC's insured mortgages require both, and bare land or a seasonal cabin most often needs a larger down payment. Lenders lend on rural homes, but they look harder at the property: whether it can be lived in all year, how you reach it, its water and septic, and what part of the land is worth lending on. With less than 20% down a mortgage is usually insured, and the insurer's rules then decide which properties qualify. A report answers several of the questions an appraiser asks. Look up the address or PID on PlaceDossier to see the record for that lot. Under 20% down: With a down payment under 20% of the price you'll typically need mortgage loan insurance. The least you can put down is 5% of the first $500,000 and 10% of the rest up to $1.5 million; from $1.5 million it's 20% (the Financial Consumer Agency of Canada's down payment page). CMHC's homeowner purchase loans follow the same 5% and 10%, on a price below $1,500,000 where more than 80% is borrowed (CMHC's Homeowner Quick Reference). What CMHC asks of the property: For an insured homeowner loan the property must be in Canada, suitable and available for full-time, year-round occupancy, and have year-round access, including a home on an island reached by a vehicular bridge or ferry (CMHC's Homeowner Quick Reference). Its second home product asks the same, with year-round vehicular access (CMHC's Second Home page). A cabin you can't live in through the winter, or reach only by boat, a trail or a seasonal road, falls outside them (our reading). Amortization: An insured homeowner purchase loan runs at most 25 years, or 30 years under CMHC Home Start (CMHC's Homeowner Quick Reference): at least one borrower must be a first-time buyer, or the home newly built (CMHC's Home Start page). Bare land and building: CMHC's purchase loans are for a home. Buying bare land to build on later is most often financed apart from them, with a larger down payment and a shorter term, and a new house with a construction mortgage paid out in draws as the work passes stages (common lender practice, our reading). CMHC Improvement covers buying with improvements and new construction financing (CMHC's Homeowner Quick Reference). What an appraiser looks at: On rural land a lender's appraiser commonly weighs the road and whether it's kept open in winter, a well that has been tested, a septic that works, the house's heat and power, a manufactured home's registration and foundation, and how much of the acreage adds value, often less than its size suggests (our reading). Each is a question a report or its pages answer part of: road access, wells and well water, septic, power, floodplain, and manufactured homes. Insurance comes first: A lender wants the house insured from the day you take possession, and an insurer asks about the fire hall, a hydrant, the wood stove and the wiring (see home insurance). A rural house an insurer won't take is one a lender won't fund (our reading). What it means for a buyer: Ask the lender or a broker before you remove subjects, not after: whether they lend on this property, on how much of the land, with how much down, and whether they'll want a water test, a septic inspection or a survey certificate.

Can I get a mortgage on a rural BC lot, acreage or cabin?

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Before you buy: who to ask