When buying a home in British Columbia you have various options including a house, condominium or town home and you also have the option of buying leasehold property in certain locations throughout the province. There are also different kinds of leases such as private, native and crown corporation (government). In each case they are treated according to risk by the lender. Before making an offer on a leasehold property you, as the buyer, should consider your financing options before moving forward.
Buying Leasehold Property
Many lenders will have restrictions on buying leasehold property when it is a private lease. In those cases you may want to visit the local credit union in the area as they will likely be familiar with the property and may have held a mortgage on that property previously. Some lenders will have restrictions on buying leasehold property when it is a native lease. In those cases the local bank branch in the area may be the best option. In the case of crown land leases there are a few lenders who will consider these when buying leasehold property. Your mortgage broker can collect the address of the property from you and check it out before you make an offer.
If you find a property that is acceptable to a lender then all we need is details of the master lease which will show us the remaining time left on the lease and the terms of the lease. In addition the lender will require an appraisal on the property. There may be some additional conditions or restrictions such as length of amortization and down payment and in some cases the lender will require the mortgage be insured by Canada Mortgage and Housing or another insurer. The cost of that insurance will be added to the mortgage as a one-time fee.
Of course as with all purchases, when buying a leasehold property, you should always do your due diligence with your realtor to ensure the property is suitable for your needs and to have the property inspected by a licensed home inspector.
For more information on buying leasehold property and opportunities for Crown land, visit http://www.for.gov.bc.ca/Land_Tenures/crown_land_application_information/program_areas.html or contact your realtor. If you don’t have a realtor in mind, I am happy to refer you to some professional realtors throughout the Vancouver area.