In Canada, is a mortgage for land different than a mortgage for a house?
Written By: admin on June 7, 2009
One Comment
I am interested in purchasing some land that I will use for recreational purposes. It isn't farm land and I won't be building a home on it. I have the ability to place up to 75% down in cash, but I would rather only place 25% down.
Can a traditional mortgage be used to buy land? Are there any differences? I imagine land must be able to be financed somehow.
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Tags: building a home, land mortgage, recreational purposes, traditional mortgageTags: building a home, recreational purposes, traditional mortgage
In Canada, raw land is usually tough to get a mortgage on through a normal bank. Banks will want 50% down or in some cases they don't want to touch it unless you are going to build on it eventually.
Credit unions are more open to land but again, they will want 25% down at least.
Another way to get it done simpler is if you have lots of equity in your house, refinance it to take the equity out and use that liquid cash to pay for the raw land. You will as well be able to get a lower rate because its a more tangible asset than just raw land.
Excellent luck,
Victor
vjanus@CanadaMortgageTeam.com