Mortgages for Small Condos
I’ve had a lot of Buyers recently – both looking for themselves and looking as an investment – inquire about units that are under 500sqft. There are a number of those units in Vancouver, everywhere from Mount Pleasant to Collingwood, in old buildings and brand new buildings. Naturally, these units are less expensive than their bigger counterparts which puts them in the affordability range for a lot of Buyers. I’ve seen a lot of great units that have been under 500sqft (the floor plan must all the difference in these scenarios) and often if rentals are allowed, they can be great rental properties thanks to the low mortgage payments and good monthly income.
However – the banks and other mortgage lenders look at these properties as units that the Buyer wouldn’t live in for very long and thus make financing a little more difficult for prospective Buyers. There are a few things you need to know about units under 500sqft..
1. Units that are under 500sqft can be financed through the traditional mortgage route, but you may have fewer lenders to choose from. Fewer choices in lender may lead to less than ideal mortgage terms, but a savvy Mortgage Broker can do wonders.
2. Lenders may require that any unit under 500sqft have a proper bedroom, which means walls and a door to separate the space from the living room. The walls can be a sliding door, or a glass wall, there just has to be separation.
3. Some lenders might require a much higher down payment in order to finance these units, though not all.
4. Lower all around costs! Keep in mind that a smaller unit should have lower strata fees than larger units, lower monthly insurance rates, less furniture needed, etc.
5. There are some really creative furniture and design ideas out there to help use every inch of a smaller space. Spend some time designing the space to take into account storage and layout, and you’ll make the most of the space.
6. Outdoor space does not count towards this sqft, so the unit may have under 500sqft in interior space, yet a large patio or balcony to make up for it. Making the most of this space gives you more living space when needed. Check out this unit unit at 4372 Fraser St – only 480sqft but it has a great balcony space as well.
Let us know if you have any questions about buying a smaller unit – we’re happy to help find you a great option in East Vancouver!