For musician Adam Ruzzo, his custom log home has limited lending options for people interested in his $319,000 asking price.Selling a hand-built log cabin minutes away from Ontario’s Algonquin Park should be as easy as posting up a for sale sign. But for musician Adam Ruzzo, his home comes with a big caveat: You may not be able to get a mortgage for it.
For reasons big and small, that disqualifies the property for most lenders. Or at least that’s the mainstream consensus. “It dawned on me you could move up north with way less money. You could live up there, in a more peaceful way,” he said. To assess a home’s feasibility, Kawartha calculates the cost needed to hook it up to the grid in the future. For instance, it calculates approximately $1,000 a hydro pole with a maximum expenditure of $15,000 , and then builds that into the loan to value ratio. This could mean a higher interest rate than that for a similarly priced property on the grid.
Ian Thomas, chief executive officer of Kindred Credit Union in Kitchener, Ont., says his institution still has several branch offices with hitching posts out front for Mennonite members who make up about 15 per cent of the union’s loan portfolio. He said Kindred has extended mortgages to Old Order Mennonite homes without a connection to the electrical grid, where the usual resale risks are ameliorated by Kindred’s knowledge of and deep connections to those communities.