Financing the Purchase of a Resort Condominium at Blue Mountain

Part 3 of a 4 part series

Arranging financing for the purchase of a condo hotel unit, such as those in the Village at Blue Mountain, is not always as straight forward as buyers might expect.  Since these are commercially zoned units that are principally used for the generation of revenue, many lenders treat them as a commercial property purchase with different terms and rates.

Some unit buyers take mortgages or lines of credit against the equity in their principal homes to use as a partial or full payment of their condominium purchase.  In some cases, people assume existing mortgages on resale units.  Some people are able to arrange financing through their own banks however, I have found that out-of-area lenders are less likely to do so compared to local lenders in our area who better understand the programs and the developments.

I don’t want to sound like I’m doing a commercial however, one of my favourite big bank branches is Scotiabank in Collingwood.  It happens that they have been involved with the Village since the first launch of sales ten years ago and offer a good example of a local lender that is able to offer buyers a range of financing options.  In regard to Village units, they will typically finance at a 70% loan to value ratio on the purchase price of up to 75% subject to approval) or up to 60% on units less than 462 square feet in size.  Rates are at least 1% below Scotia’s posted fixed rates for 5 or 7 year terms and, they will look at a maximum amortization period of 20 years.

There are some additional costs to factor in when you are crunching numbers on a potential purchase.  First, units are subject to HST.  That means an additional 13% paid on closing.  If buyers are HST registrants, they may be able to claim some or all of that back.  All buyers are wise to consult with an accountant for professional advice in this area.  Secondly, units that are enrolled in the Village Association must pay a transfer fee of 2% of the purchase price as an entrance fee into the Association for units in the Village and, 1% for the other units such as Snowbridge, River Grass and the legacy units.   Of course other closing costs will include the typical fees such as lawyers costs, land transfer tax and other closing adjustments.  Buyers should also be advised that their offers should always be made conditionally upon buying and reviewing TWO status certificates:  one for the condominium corporation itself and another for the village association. 

Next Week:  Changes at Blue Mountain

Read Part 1 of series:   Buying A Condo In The Village at Blue:  What You Need To Know
Read Part 2 of series:  Why People Buy Units at Blue


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About Marg

is an award-winning real estate Broker who has successfully been helping people move since 1989. When it’s time for a move in or out of a bigger, smaller, better, more expensive, less expensive, newer, older, house, condo, farm, investment property, vacant lot or business, talk to Marg.

This entry was posted by Marg on Monday, November 8th, 2010 at 9:56 am and is filed under Blue Mountains, Buying Real Estate, Condominiums, Investment Property, Money Matters, Vacation Property. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Comments

  1. nick says:

    I was just wondering when you wrote these articles.

    I am interested in the older ski on ski off units in the crossing and chateau.

    I was told by a realtor in the area today that they make the most money as long as you upgrade then. he said that on average you can net 20-25K per year

  2. Marg says:

    I can assure you that no unit like that will net 20-25K per year. If that were true, I’d buy a bunch myself and there would be a line-up of people wanting to do the same. Like most units, you can look for them to cover operating costs and potentially a bit of mortgaging but not all. Perhaps the agent you spoke to meant gross? In any case, offers should include a requirement for sellers to provide the last annual income and expense statements so you can see for yourself what actual incomes have been. You may also want to speak with Homeowner services who may be able to give you a sense of general gross revenues. Hope that helps.

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