April Dunn - Apr 12, 2025 / 11:00 am | Story: 544062
Photo: Pixabay
With a growing number of Canadians choosing to vacation at home this year—partly in response to ongoing trade tensions with the U.S. and a desire to support our own economy—interest in local getaways and vacation properties is on the rise.
If you’ve been thinking about buying a cottage, cabin or seasonal retreat, there’s no better time than now to explore your financing options. Here’s what you need to know before you make the leap:
Start with a mortgage pre-approval—Before browsing listings or booking showings, it’s important to get pre-approved for a mortgage. That will help clarify your budget and gives you an edge if you’re ready to make an offer.
There are two types of vacation properties. Vacation homes generally fall into two categories, Type A and B. The category affects how much you can borrow and what the down payment requirements will be.
Type A properties
These are more traditional secondary homes and must meet these criteria:
• Foundation must be permanent and installed beyond the frost line. That includes concrete, concrete block or preserved wood foundations, or post or pier foundations on solid bedrock.
• Must be zoned and used as residential, rural or seasonal. Mixed uses or rental pooling is not accepted.
• Property tenure must be freehold or condominium.
• At minimum, property must have a kitchen, three-piece bathroom, a bedroom, and a common area.
• Remaining economic life must be 25 years.
• Year-round road access on reasonable quality public roads, serviced by the local municipality.
• Privately serviced roads are allowed, provided there is a maintenance contract in place.
• Property must be winterized with a permanent heat source. For example, heating can be baseboard, forced air, water radiator, radiant, coal, propane, geothermal heat pumps, or heat pumps.
• Good quality construction with no signs of deferred maintenance.
• Water source: well, municipal serviced, and cistern. Water source must be drinkable. Lake or river water is acceptable, provided the property has its own filtration system. For example, a reverse osmosis system.
• Property must have electrical power. Alternative energy sources may be considered on a case-by-case basis such as solar power, wind energy and generators.
• There must be good market appeal in the area with no adverse influences or neighborhood nuisances.
Type B properties
• No permanent heat source is required. For example, a wood stove, fireplace, stove or heat blower is acceptable.
• Foundation may be floating. For example, sitting on blocks.
• Seasonal road use is acceptable. This means the road does not have to be ploughed during the winter.
• Water source needn’t be drinkable. However, there must be running water in the home.
• Property may be accessible only by boat.
• Holding tanks may be considered provided it is common for the immediate area and meets all municipal/provincial requirements (e.g., CSA approved holding tank).
Maximum property value
• Greater than 80% loan-to-value ratio. Property value must be less than $1.5 million.
• Less then or equal to 80% loan-to-value ratio. Property value must be less than $1 million.
Note: Mixed uses or rental pooling is not accepted. Co-ops or interest ownership is not accepted. No investment properties.
Financing options beyond the basics
If you already own a home, you might be able to leverage your existing equity to fund your vacation property:
• Refinancing your current mortgage
• Home equity line of credit (HELOC)
• Second mortgage
• Personal savings
• Gifted funds (Type A only)
Even hotel condo units may be eligible for up to 95% financing, provided they are high-ratio insured and owner-occupied.
Every lender has different rules
Lender requirements for vacation properties vary significantly, especially in rural areas where 25% to 50% down may be required. A mortgage broker can help you compare your options and find the best fit for your goals.
So, explore what’s possible. Whether you're looking for a peaceful family retreat or planning a smart real estate investment, a mortgage broker is there to guide you through every step.
You can email me at 1-888-561-2679 or book a time to chat at calendly.com/april-dunn.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
April Dunn - Mar 29, 2025 / 11:00 am | Story: 541279
Photo: Pixabay
There is nothing more disheartening that having your mortgage request declined because qualifying for a mortgage today is more complex than it once was.
That is why it is so important to include a condition for financing in any offer to purchase a new home. Don’t assume you will be approved now because you were in the past or you only want to move your current mortgage to a new property.
Even if your bank says no, you may still have options. Let’s explore some common reasons for mortgage declines and how you can improve your chances of approval.
Here are some of the most frequent reasons why lenders might reject a mortgage application:
You didn’t pass the mortgage “stress test”—Although the current mortgage stress test rate is 5.25%, you must qualify at the contract rate plus 2%. For example, if your contract rate is 4.69%, you’ll need to demonstrate you can afford payments at 6.69%. All federally regulated lenders (such as banks) and most credit unions follow this rule. There are some exceptions, so make sure you chat with your mortgage broker to see where you might fit with some of the new rules for qualifying.
Low credit score or poor credit history—Lenders typically look for a credit score of 680 or higher to offer the best mortgage rates. If your score falls below that threshold, it could limit your options or result in higher interest rates with an alternative lender.
Insufficient income—Your income needs to cover not only your mortgage payments but also property taxes, heating costs, strata fees and day-to-day expenses like groceries and transportation. If your declared income is too low, you may not qualify for the amount you’re seeking.
Employment instability—Lenders typically prefer salaried or hourly employees with consistent, guaranteed income, generally in the same line of work for a minimum of two years. Self-employed individuals—especially those with newly established businesses—often face more scrutiny.
Property issues - Lenders aren’t just approving you, they’re also evaluating the property. Structural damage, mold or other significant issues can raise red flags, as those problems often lead to costly repairs. Properties with major defects may not meet lender requirements.
Low appraised value—If the property’s appraised value comes in lower than expected, it could affect your mortgage approval. For a purchase, this may mean needing a larger down payment. In the case of a refinance, the amount you can borrow is capped at 80% of the appraised value, which could limit your access to equity.
A mortgage broker can help you strengthen your mortgage application and explore alternative lending solutions. Here’s how:
Credit improvement: If your credit score is holding you back, the broker can develop a plan to repair it, by consolidating or paying off certain debts or ensuring timely payments.
Debt management: A broker can assess your financial situation and create a strategy to reduce debt, making your application more appealing to lenders.
Property evaluation: A broker can help you understand how different property types affect financing and guide you in setting a realistic budget.
Down payment planning: If your downpayment is too low, a broker can outline a savings plan.
Alternative lender options: If you’re self-employed or don’t meet the strict criteria of traditional banks, a broker has access to alternative or private lenders who offer more flexible short-term solutions. With a plan, that can be an excellent alternative.
To house hunt with confidence, consider getting pre-approved before you start viewing properties. A pre-approval ensures you know your borrowing power and reduces the risk of falling in love with a home you can’t finance.
If your mortgage application has been declined, don’t lose hope.
You can email me at [email protected] to discuss your situation. Or book a consultation at: calendly.com/april-dunn
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
April Dunn - Mar 15, 2025 / 11:00 am | Story: 538642
Photo: Pixabay
I thought it might be interesting to take a look at how my reverse mortgage clients used reverse mortgages last year because reverse mortgages continue to be a powerful financial tool for many of my clients who are aged 55 and older.
They leveraged their home equity to enhance their lifestyle, support family and secure financial freedom without the burden of monthly mortgage payments.
Here are some of the most impactful ways my clients used a reverse mortgage to achieve their goals.
1. Living inheritance and estate planning
A growing number of homeowners used a reverse mortgage to provide financial assistance to their children and grandchildren, effectively creating generational wealth. By accessing home equity now, they were able to help with education costs, home down payments, or investments, all while retaining ownership of their homes.
2. Debt elimination
One of the most popular uses of a reverse mortgage was eliminating debt. Clients used their funds to pay off existing mortgages, lines of credit, and high-interest credit card balances, allowing them to enjoy a stress-free retirement without monthly debt obligations.
3. Aging in place
Many came to me as they wanted to stay in their homes for as long as possible by using a reverse mortgage to finance renovations and home modifications. Whether upgrading bathrooms for accessibility, installing stair lifts, or improving insulation and heating, these renovations made aging in place more comfortable and sustainable.
4. Maximizing home sale value
For those looking to sell, a reverse mortgage provided an opportunity to update and modernize their properties before listing. These improvements resulted in higher sale prices and, thanks to an open reverse mortgage option, they could sell without worrying about prepayment penalties.
5. Right-sizing
Many clients used reverse mortgages to purchase homes better suited to their lifestyle and needs. Interestingly, many chose to upsize, moving into larger homes that offered more comfort and space for entertaining family and friends—all without taking on monthly mortgage payments.
6. Generating rental income
Some homeowners used reverse mortgage funds to create rental suites within their homes. These renovations provided them with a new stream of supplemental income, improving financial stability while maximizing the use of their property.
7. Funding care and support
As healthcare costs continue to rise, some homeowners used their reverse mortgage proceeds to hire caregivers, housekeepers, or support personnel. Others funded in-home healthcare services, ensuring they could remain in their homes comfortably and independently for longer.
8. Bridge financing
In a fluctuating real estate market, a reverse mortgage served as an excellent bridge financing solution. Clients used an open reverse mortgage to access funds while transitioning between selling an existing home and purchasing a new one, giving them financial flexibility without pressure to sell quickly.
9. Purchasing new properties
Some clients leveraged their home equity to invest in rental properties or vacation homes. This strategic use of reverse mortgage funds allowed them to generate income or enjoy a second home for personal retreats and family getaways.
10. Travel adventures
Finally, many homeowners fulfilled lifelong travel dreams by accessing their home equity. Whether it was visiting their homeland, taking luxury cruises, or spending winters in sunny destinations, reverse mortgages helped turn these travel goals into reality.
Reverse mortgages provided my clients with financial freedom and flexibility in 2024. Whether eliminating debt, supporting family, or enhancing their quality of life, these strategic uses showcase how home equity can be an invaluable retirement asset.
If you're considering a reverse mortgage, consult with an experience mortgage broker to explore how it can help you achieve your own financial goals.
Please reach out to me at [email protected] if you have questions or you can book a time for a chat here on my calendar and I’m happy to spend some time with you to see if this might be a suitable option for you. calendly.com/april-dunn
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
April Dunn - Mar 1, 2025 / 11:00 am | Story: 535914
Photo: Pixabay
Facing foreclosure can be an incredibly stressful and overwhelming experience.
If you have found yourself in any of the following situations, you may be at risk:
• You are about to miss a mortgage payment because you don’t have the funds to pay.
• You have missed one or two mortgage payments.
• You have received a notice or demand letter from your mortgage lender.
• You have been served a Petition for Foreclosure.
If any of those apply to you, it is a serious situation and you may be on your way to foreclosure. However, you do have options and the sooner you take action, the better your chances of finding a solution.
Why ignoring the situation is the worst thing you can do
It may be tempting to ignore phone calls from your lender or avoid opening the demand letter they’ve sent, but this approach will only make matters worse. Here are some potential consequences of inaction:
• You won’t have any say in the court proceedings and they will move forward without you.
• If your home is sold, you will receive little, if any, notice that you must vacate the property.
• You may have significantly less time to stay in your home than if you had appeared in court and explored alternative solutions.
How a mortgage broker can help
One of the best steps you can take when facing foreclosure is to speak with a mortgage broker as soon as possible. A mortgage broker has the expertise and industry connections to help you explore solutions that might not be immediately obvious. Here’s how they can assist:
1. Refinancing to lower your monthly payments
If your financial difficulty is temporary, refinancing your mortgage might be a viable option. A mortgage broker can help you find lenders who are willing to offer a lower interest rate or extend the amortization period, reducing your monthly payments to a more manageable level. This could help you avoid default and keep your home.
2. Securing a new mortgage with a different lender
If your current lender is unwilling to negotiate or offer a feasible solution, a mortgage broker can explore alternative lenders who may be willing to provide you with a new mortgage to pay off the existing one. This can be particularly helpful if your credit is still in decent shape and your home has equity.
3. Assessing the viability of selling your home
If keeping your home isn’t a realistic option, a mortgage broker can help you determine whether selling the property yourself is a better financial decision. If your home has enough equity, selling on your own terms may allow you to pay off the mortgage and avoid the negative financial consequences of foreclosure. This could also preserve your credit rating and make future homeownership possible.
4. Advising on legal and court proceedings
In some cases, going to court may be the best option to delay foreclosure and explore further solutions. While a mortgage broker is not a lawyer, they can work alongside legal professionals to ensure you have all the financial information you need to make informed decisions about your case.
Act early to prevent escalation
If you fall behind on your mortgage, interest and legal costs can accumulate quickly, making it even harder to catch up. The earlier you seek assistance, the more options you’ll have. A mortgage broker can guide you through this process, helping you navigate your financial challenges and find a solution that works best for you.
If you’re struggling with your mortgage, don’t wait—reach out today to explore your options and regain control of your financial future.
You can reach me at [email protected] or set a time for a chat here on my calendar calendly.com/april-dunn
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
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