Building Or Buying?
Question: How can I find out if the home I want to buy is situated on a flood plain?Answer: A flood plain is the relatively flat land beside a lake or a river. It's naturally liable to flooding if any overflow occurs. Flood plains can be deceptively attractive building sites; houses and other buildings are often erected on them despite the risks involved. The result can be damage and disruption due to floods.
Millions of dollars are paid every year for flood relief and rehabilitation by governments and other agencies. But this can't completely compensate for the damage and distress caused by flooding.
Prospective home buyers should obtain information on flood risk prior to entering the housing market. Flood risk maps show areas liable to flooding and the extent of past floods. For information, write to the Flood Damage Reduction Program, Inland Waters Directorate, Environment Canada, Ottawa, Ontario K1A 0E7. Provincial environment or natural resources departments may also do flood-risk mapping and zoning.
Question: I've heard it can be difficult to get a mortgage on some rural properties. Why is that so?
Answer: Unless you're purchasing a newish bungalow on a one-acre lot you'll find that country properties are difficult to finance. Interest rates are higher than in the city; much more so for old houses. If you're paying $70 000 for a farm that has 50 acres, valued at $1000 dollars an acre, your old house is automatically valued at $20 000 - less than the value of the land. Mortgage companies, used to city standards, regard the other 49 acres as an excessively large lot.
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May 22, 2012