Did you know some lenders will finance 95% of a leasehold property?

Most of the big 5 banks require a minimum down-payment of 20%, but there are still a few wholesale lenders willing to arrange financing with a down-payment of 5%.

A couple things to note about these lending scenarios are:

• There must be adequate time left on the lease, for example: A 25-year amortization requires a minimum of 30 years left on the lease.
• The mortgage needs to be insured
• Leases must be Provincial, Municipal, SFU or UBC

Also, when advising your clients on the purchase of a leasehold property its worth thinking about their age, financial situation and their plan for the property.

A growing number of elderly homeowners are relying on their house as a form of “retirement savings account” by taking advantage of “reverse-mortgage” products.

A Reverse mortgage product allows elderly-homeowners to supplement their income by withdrawing the equity built up in their property in either a lump-sum payment, or monthly allowance.

A lease-hold property is NOT ELIGIBLE for a Reverse-mortgage if there is less than 75 years remaining on the head lease, or if it’s located on First-nations land.

If you would like more information on regarding financing leasehold properties, please send me a message.

Thanks for reading!

Adam Sale