# Extension of my cottage



## Taxsaver (Jun 7, 2009)

I have a cottage that I'm looking to transform into a 4-season place where to live North of Quebec City. I would appreciate your help and opinion on 2 items: Becoming eligible for a mortgage, cost of extension.

1. MORTGAGE

My cottage is too small to get a mortgage on, at least for CIBC. Are others bank will tell me the same? It is 432 square-feet - 24'X18' (Lenght X Width). The bank told me I need 645 square-feet. Then 24'X27' would give me 645 s.f., so an extension of 9 feet on the width. 

Right now, I have a personal loan of $45,000, and a line of credit of $30,000. All in all, I have monthly payments of $800. I work overnight which pays more, as much OT as I can, and I've cut expenses as much possible. I am willing to work 7 days a week if needed. I make $22 an hour in Toronto. One of my goal to pay as much debt as fast as possible is to rent it out from this Summer, all-year long, possibly for 5 or 6 years so at the end I have no or little mortgage left to pay. 

2. COST OF EXTENSION

If not mistaken, we have to tear down the roof, and build a new one. I also need these: Full insulation' it is half-done right now. Way too cold to live there in Winter. I am waiting for contractors to give me cost estimates. How much do you think I should expect in average? In case the bank does not want to increase any more the line of credit or give me a loan for the renovations, I may not have all the money to pay the contractor. Do you think he could wait that I get approved to get the mortgage and then be paid afterwards? Do they ask for a large deposit? I do know people who think they know who to build a roof, but I insist on having a professional who has valid certification to do it. I don't want bad surprises and be laughed at in a few years.

I'm sure I forgot to provide with some info, but I feel confident that it is a good start. Thanks!!!


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## Four Pillars (Apr 5, 2009)

You must really love that cottage.

I would talk to different banks and see what they say.

You really need to make sure you have the money to complete the work before hiring a contractor. You don't pay up front, but most will expect payments along the way. There is a good chance, they'll want some type of deposit.

I'll stick to renting....


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## Just a Guy (Mar 27, 2012)

A lot of banks won't lend on recreational properties period.


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## Taxsaver (Jun 7, 2009)

They will give a mortgage of 80% of the value of the cottage. The remaining will be on the loan, so at leat, no more line of credit that asks for very high monthly payment.


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## Taxsaver (Jun 7, 2009)

I will certainly talk to other banks. Can I get the info by phone, or do I need to show up at the branch?


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## Taxsaver (Jun 7, 2009)

A friend of my brother-in-law would be the best candidate for contractor. I could easily convince to wait until I get the mortgage to pay him. I guess I'll need to talk to him first. I'm not so sure he is interested given his age. I would hate that he feels obligated to help me, just to see him get dizzy and break his neck. He is over 55, and he's not in very good health.


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## Taxsaver (Jun 7, 2009)

My problem #3 is the form of the extension. I was suggested to build a atrium, but that's a huge one for the dimension of the house. Is not it? I might prefer to have more living space. Nine feet would make a huge difference. I have two bedrooms, but they are so small. 

Let's say we want 645 sq. feet, and I have to choose between 2 options: Enlargement of the width by 9 feet 2. Enlargement of the width by X feet, and the lenght by Y feet. Is the Option #2 going to cost more since instead of modifying one wall, we modify two? I want to keep it as low-cost as possible for now. In 5 years, I may change the plan. 

It would have helped to save a few thousands dollars a few years ago. I'm working against the clock now.


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## Four Pillars (Apr 5, 2009)

You can try calling or you can try going to a branch. Try something!

To be honest, your plan doesn't sound very good. Is the main reason you want to make it bigger is to qualify for a mortgage which will allow you to winterize the place which will allow you to rent all year round?

Are you sure there is a year-round market for that location?

645 sq ft still isn't that big. If I were going to do that kind of reno, I would wait and build something bigger.

Can you rent out the cottage as is for the summer months?


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## Charlie (May 20, 2011)

I agree with FP. I think you need to crunch the numbers realistically to determine if it makes sense to do what you propose. Your plan seems to be driven by the availability of financing. Off season cottage rentals are often not great returns. So maybe rent it in the summer and save up the money until you have enough to do what you really want to do with the place?


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## marina628 (Dec 14, 2010)

You will save just expanding on one side than doing both width and length in terms of wiring may having to be relocated etc but savings will not be much.We are doing expansion of my house in Newfoundland and the cost difference was less than $4000 .Our extension is 1200 sq ft and before people make any smart remarks on labor cost difference they are all workers being paid $25.00+ per hour .We have a cottage here in Ontario and we built out 10 x 44 ft ,My husband did all the work and material costs were around $20,000 just to give an idea on dead expenses.


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## Taxsaver (Jun 7, 2009)

First, thank you so much for helping me!

Expanding is solely for mortgage purpose. I can rent out as it is right now. However, we completely took out the front porch. Not sure if we threw away the material. I guess we can build a temporary one for the renting. I think I can rent it for $600 a week, so that would give me $4,800 for summer.

I will have $15,000 available on a line of credit. High monthly payments, but only until the mortgage is effective.

I'm not in such a rush to get the mortgage, after all. As someone suggested, I may as well wait to get more money by renting it out, and make a bigger enlargement. 

I had an offer a few weeks ago to rent it all winter. But since it is not ready... It does not mean I will get any if future winters.


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## Taxsaver (Jun 7, 2009)

The reason for insulating the cottage is indeed for renting it out in winter. If not renting, nobody will live there next winter.


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## OhGreatGuru (May 24, 2009)

Aside from questions on how to finance it, there are far too many technical questions for one thread, and probably for this financial forum generally.

Construction costs in a remote area will bear little resemblance to those in our cities, so it's not likely you will get any useful information on costs, unless you are lucky enough to find a forum member from the general area of your cottage, who also know something about construction costs.

As in so many things, Quebec tends to be "different" in its building regulations, so I wouldn't count on out-of province advice being readily transferable without lots of qualification.

Without drawings of what you have now and what your design objectives are it's really not practical to constructively comment on how you should re-design it.


_"A friend of my brother-in-law would be the best candidate for contractor."_ Is he the best candidate because he is a friend of your brother-in-law and willing to attempt the job, or because he is an experienced, qualified contractor, with good references, that your brother-in-law happens to know? If the former, don't do it.


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## donald (Apr 18, 2011)

Hire a contractor for consultation,rough estimate,maybe ''loose'' preliminary plans & have it priced out and spec'd proper codes ect.
This is the generally the first step in the process,you will have to pay a fee for this service but usually if you hire said contractor the fee can be passed into the project.
It may cost you a grand or 2 but you will know with generally certainty what your dealing with.(with a clause that it's just a quote)
The price on has to pay sometimes just to ''find'' out
No different than getting a consultation with a financial planner say and him/her charging a fee to show you in detail what their plan is for managing money ect
With those rough costs(with a licensed contractor ect)you can submit that at least to your bank also detail what you plan to do in detail and makes it easier for the bank to assess it instead of going in cold


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## Taxsaver (Jun 7, 2009)

This is the plan of the cottage. The washroom is very small, as you can see. The atrium is to be built.

I am calling contractors this week who will go to the cottage within 2 weeks, and give me an estimate.


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