Ontario Oakville.ca

Land mortgages involve a particular type of loan where the money borrowed is used to purchase a piece of vacant land, rather than a building or structure that is on the land itself. Generally speaking, those who purchase vacant or raw land have the intention of building a structure on top of the land at a future date.

A land mortgage in Ontario is more of a risk to the lender as opposed to a traditional mortgage for a property with a structure already built. This type of mortgage is less secure because if a borrower is in default, the lender will be stuck with a vacant piece of land that may be challenging to sell.

Considering the higher risk involved with land mortgages, lenders and banks will have different criteria and requirements, compared to that of a traditional mortgage. For example, there may be a higher percentage required of the sale price for a down payment on the land, which will give the bank more security knowing that the borrower has the necessary funds to put in as equity on the land. In addition, the borrower may be required to buy mortgage insurance or offer some other form of collateral in order to support the bare land mortgage Ontario.

Getting Approved for a Land Mortgage

Due to the stricter stipulations for a land mortgage in Ontario, getting approved for such a mortgage may be more difficult. Those with a healthy income and a high net worth may get approved for a bare land mortgage much more easily. However, those with a much more modest income and net worth may find it quite challenging to get approved for a land mortgage.

In these situations, you need the services of a professional and experienced independent mortgage broker who will work hard and diligently to get you the mortgage you need to buy vacant land. Claire Drage at YourMortgageOptions.ca is one such broker who works hard to shop around with various lenders and track down many non-conventional sources to help fund your land purchase. Call Claire today at (905) 330-9488 and work with a professional who will work hard to get you the mortgage you need to buy vacant land.