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Mortgages

Construction

Many Canadians are choosing to build custom homes with special features to suit their lifestyles. The process can be intimidating but not if completed with the right mortgage broker. We can give you the support you need from start to finish to guide you through the process and explain all the important details along the way.

Typically the construction process is done in three to four draws over a 9 month period however more elaborate homes can take up to two years. A Progress Draw is a type of funding, which is advanced in intervals as the house is being built. There are usually 3 draws at; 32% (lock up), 70% (dry wall) and 100% (completion). Each draw requires a progress Inspection report, which details the percentage complete prior to the advancement of funds. Essentially you are updating the appraisal with the current status of the project. Not to be confused with a Purchase Plus Improvements mortgage, the construction mortgage essentially starts from scratch. Getting a construction loan can be a challenging and complex process. Using an experienced mortgage broker can help you get approved quickly and with a great interest rate. Please see below for more details.

The Process

  1. Complete our online mortgage application
  2. Send us the requested documentation
  3. Order appraisal (half price through a mortgage broker)
  4. Obtain mortgage approval
  5. Construction mortgage instructions sent to lawyer
  6. 25% to 40% (Cost to build) is required capital
  7. Complete construction to first draw (typically 32% TO 40%)
  8. Order appraisal update or inspection
  9. Request funds from lawyer
  10. Rinse and repeat up to four times
  11. Income verification
  12. Cost to Build & construction drawings -appraisal 
  13. Proof of capital for build

Why use a mortgage broker?

YOUR lending institution will only advise you on their own product. You could visit every institution out there, one by one if you had time......

Or, you can talk to talk to a mortgage broker who will shop for the best mortgage for you from all available lenders including many you would not usually think of on your own. 

 

Are there fees for your services?

NO! There are no fees on conventional mortgages as we receive payment for placing the mortgage from the financial institutions, however, in some circumstances lender/broker fees may apply.

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