Many Canadians dream of owning rural property(including farms) with lots of land AND low taxes. For decades mortgage lending on rural properties with ‘acreage’ has been restricted to the value of the house and 1 to 5 acres maximum, depending on the lender. This meant that purchasers were required to bridge the gap with their own money, that is, equal to the value of any excess acreage that was not valued for mortgage purposes. The reality was that unless you had a very large down payment and/or you were willing to take on a higher interest second mortgage, it was not feasible to purchase such a property. Our new ‘breakthrough’ financing program changes all that with prime residential rates on properties with up to 200 acres. Eligible properties must be owner occupied, principal or secondary residences anfd have residential, rural or agricultural zoning. This can include hobby farms and year round recreational(cottage) property with large acreage as well. Rental properties and vacant land do not qualify.
John and Jacqueline Pelletier from Burlington were one of the first to benefit from this new program. They recently bought a 100 acre property at a purchase price of $1175,000. We were able to get them a $905,000 first mortgae at 2.25%/35 year amortization. The full purchase price was accepted as value and the required down payment was 270,000. In the past, lending value would have been limited to the house and 5 acres and the maximum loan would have been approximately $550,000 requiring a whopping down payment of $625,000 or $355,000 more than double required now. Without question it is considerably easier to finance such a property under this new program.
Refinancing is allowed, however certain other restrictions apply.
Should you currently own such a property(want to refinance)or are looking to purchase one, call us today for more details, and take advantage of 35 year amortizations before they disappear on March 18th.
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