You can find tips on how to improve your own credit and increase your personal chance of getting a mortgage in Red Deer. However, the property you want to buy is another factor to consider. Let’s look at the factors that can determine whether or not most mortgage lenders would be willing to extend a mortgage and the loan terms they would consider. 
The Type of Property
The type of property will affect its eligibility for a mortgage. The more universally desirable the property, the lower the interest rate and down payment. This means that an unusual home that requires extensive work to fix it up may not be eligible under a typically bank or A lender mortgage and may require a private loan until the home is fixed up then you can refinance it with a Bank or another A lender. The normal purchase of a home in good condition will be the ideal property for a mortgage lender. Condos in good condition and relatively new buildings are also a great choice as long as they are ran good and have a good financial standing.
Rural properties can come with a larger down payment requirement or higher interest rate because they aren’t as marketable or alternatively they may require to be insured through CMHC regardless of the down payment to help mitigate risks. Working farms would require a commercial mortgage as residential mortgage lenders don’t touch them. Hybrid commercial / residential properties are harder to find a mortgage for unless it is a single family home with a legal mortgage helper such as a legal suite; the standard home with a mother-in-law suite you can legally rent out can be bought however without a legal suite you cannot use the rental income to qualify.
The condition of the property affects its value, and that affects its mortgage-ability. A major fixer-upper will be hard to buy without a large down payment or high interest rate. You may be able to buy it with a large down payment, take out a non-secured loan to pay for the repairs, and after the property is in good condition, refinance the entire outstanding balance into a single conventional mortgage.
The Property’s Location
You’ve probably heard the adage that the most important thing in real estate is the location of a property. What most don’t know is how true this is.
If the property is considered outside of major market areas, you’ll have to put more money down or get charged a higher interest rate, or be required to have it insured through CMHC regardless of the down payment amount you put down to help mitigate risks of marketability. Properties located in rural markets with low turnover will either require a massive down payment to qualify for a mortgage or to be insured through CMHC or another mortgage default provider. Being by the lake isn’t good enough. Being located in a popular summer vacation area would be good enough. Homes near hot vacation spots and or ski resorts are more marketable and easier to sell if you default on the mortgage.
If the property lacks utilities like water, power and sewer, it can cost you in other ways. Few mortgage lenders will loan money to someone to buy a property without running water or indoor plumbing. On-site alternatives like a septic tank, renewable power, or a water well can offset these shortcomings, but now you may need detailed analyses of the property and things like water testing or title insurance to prove this so you can qualify for a mortgage.
How the Property Will Be Used
Mortgage lenders are more willing to loan money to someone to buy a primary residence than a vacation property, since you’re almost certain to make the mortgage payment when money is tight. You cannot buy a rental property and insurer it through CMHC therefor are required to put 20% down payment on rental properties.
Talk to a Red Deer mortgage professional at Whalen Mortgages to understand the options available to you given the property you want to buy. 587-315-3525 to discuss your options for your next mortgage.
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