Buying a Cottage in Retirement

April 15, 2013 · Print This Article

For many, the dream of getting a cottage in retirement or spending more time there has been all that’s sustained them through the grueling years of 9-to-5 workdays or toiling in a work camp away from friends and family. Once you’re free of that life, the lure of a lakefront or country property can become quite strong. There are also lots of options in Alberta and Saskatchewan for part-time back-country and cottage living.

But there are some drawbacks, and it’s important to make sure you’re truly ready for the realities of maintaining another property before you take the plunge. And then there’s the cost of purchasing a rural property or upgrading your existing one to make it suitable for year-round living: for retirees, a reverse mortgage can help you cover the costs while allowing you to keep your existing home.

Know What You’re Getting Into
You should find out how close the nearest medical facilities are, and ask your potential neighbours how long it takes for emergency responders to get to their homes. Most rural areas have excellent volunteer emergency responders in place, but you may want to make sure your area is one of them before buying a cottage there. Since many elderly people live at their cottages in the summer, you may want to consider purchasing in a more established cottage area rather than the backwoods to make sure you’ve got medical coverage in your later years.

You’ll also want to carefully inspect the septic system and make sure there is a water treatment system or well in place before you purchase. While a home inspector will do most of this for you, you’ll want to look for signs of a bad septic like a mushy lawn in the area where the septic is located. If you see any signs of trouble, don’t buy the property, as redoing a septic system can cost anywhere from $5000 to $20,000, and you’ll have enough with good septics to choose from.

Reverse Mortgage is Better Than a Second Mortgage to Buy a Cottage
Many cottage buyers get a second mortgage on their home to finance a cottage purchase. The benefits of a reverse mortgage over a second mortgage to free up funds for a down payment are obvious. With a second mortgage, you’re saddling yourself with monthly payments during retirement. With a reverse mortgage, you don’t have to pay anything back until your sell your primary residence. Realistically, you’ll need money that you could be spending on that second mortgage to pay for property taxes and a second set of bills on your seasonal property, so a reverse mortgage is the wiser choice by far.

If buying a cottage in your golden years seems like a dream that you can’t fund, consider looking into a reverse mortgage with Horizon Equity once you purchase your dream cottage or cabin. Give us a shout to find out how it works and how your cottage dreams may be a little more attainable than you think!