What Lenders Look For Before Approving Your Mortgage For A Cottage

Many people dream of living in a place they can call home. There are also those wanting to have a place where they can chill out and relax after a hard day’s work. Others will find a serene place where they can spend their weekends and holidays. Amongst the popular choices for a stress-free home is a cottage. If you are one of those individuals looking to seek mortgage to build or purchase the cottage of your dreams, it will be good to note what lenders look for.

Location of the property

Mortgage lenders always consider this so that they will be able to determine how much they will be willing to lend. They will ask if it is on a big or small lake. They will also want to know its proximity to a major market or how you can gain access to the property. They will also check the type of roads you will take when getting to the location of the cottage.

Water source

Apart from the property’s location, mortgage lenders will also be very particular about making sure that there is a water source for the cottage. They will not just merely lend you money on the basis of having any water source. They will want to make sure that the source is safe. The reason behind why they have to check on that is because the water source can have a material impact on the cottage value once you plan to market or sell it to other people in the future.


Mortgage lenders are very particular about the marketability of the property. Before they even lend you the amount you need to purchase a cottage, they will make sure that the property can be accessed all-year round and not just during summertime when you want to feel cosy living in a cottage near the beach or lake.

Mortgage insurance

Just like any other type of home purchase, mortgage lenders will want to ensure that the property comes with mortgage default insurance especially if you are paying at least 20 per cent as down payment. You can always run to a private mortgage insurance company in case mortgage lenders will require insurance dependent on your down payment. Take note that these insurers, however, will have their own limits as to how much they will be willing to cover for your cottage. This will rely upon what can be seen inside and outside the property.

Your capacity to repay the debt

This will definitely be one of the requirements that mortgage lenders will lay down during discussions with them about the mortgage. Of course, they want to make sure they are in a winning situation before lending you the money you need to purchase the cottage. If they think you cannot repay your debt, they will certainly not consider your application.

In this regard, you are advised to get your credit scores ready before even thinking of purchasing your dream home. Make sure too that your income is enough to pay for the mortgage and of course to answer for all your other needs day in and day out. As the borrower, the lender must also be able to see that your decision to purchase a cottage will fit within your financial budget. You should then plan the purchase properly.

Lenders will always be more than willing to work with you so that you can get that place that you want to call your retirement home someday. Do not take it against them if they require this and that during the application. When you are ready with your requirements or if you still have some questions in mind about your application, you can seek the help of mortgage lenders in Montreal.

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