Construction Mortgage
Tailored Construction Mortgage Solutions in Ontario
A construction mortgage is an all-in-one loan designed for building custom homes, vacation properties, or investment properties. Our Ontario mortgage brokerage supports you throughout the process, from land acquisition to construction financing, while offering seamless conversion into various long-term mortgage options.
Comprehensive Construction Financing
Qualified borrowers can access conventional and CMHC/Genworth-insured mortgage financing up to 95% of the final completion market value. This financing covers acquisition, construction, and exit financing in one package. During the building phase, interest-only payments keep costs manageable, making construction mortgages ideal for those looking to build from the ground up.
Documentation and Resources
Applying for a construction mortgage requires thorough documentation. We guide you through the necessary paperwork to ensure a smooth application process. Key documents include:
Construction Plans & Specifications
A detailed breakdown of materials, labor, and architectural designs.
Builder Approval
Verification of contractor credentials, licensing, and previous project experience.
Construction Contract
A legally binding agreement with the builder outlining costs, timelines, and work scope.
Sales or Purchase Contract
Agreements for acquiring land or pre-construction property purchases.
Financial Statements & Credit Information
Verification of your financial health, including debt information, asset statements, and income verification.
Plans & Specifications
A breakdown of structural and aesthetic elements of the property.
Online Mortgage Resources: Tools to help estimate loan amounts, rates, and repayment terms.
Down Payment and Borrowing
Understanding how much you need to borrow and your down payment requirements is crucial when applying for a construction loan. Key considerations include:
- Down Payment Requirements: Typically, lenders require 20%-25% of the total project cost as a down payment.
- Loan Amount Determination: Based on project cost, appraisal value, and borrower eligibility.
- Equity Contribution: If you own the land, its value may count toward your down payment.
- Interest-Only Payments: Helps manage costs during the construction phase.
- Fixed or Adjustable Rate Options: Choose between stability with fixed rates or flexibility with adjustable rates.
- Draw Schedule: Funds are released in stages based on construction milestones and inspections.
- Inspection Fees: Costs associated with lender-required property inspections.
- Sales Price & Principal Payments: Ensuring long-term affordability post-construction.
- Construction Tools: Resources such as stair calculators and concrete calculators to help with cost planning.
Flexible Construction Finance Options
If your bank isn't offering the support you need, our Ontario mortgage brokerage provides flexible financing alternatives, including construction-to-permanent loan options. We ensure smoother draw schedules, better cash flow management, and tailored solutions designed around your timeline.
Understanding Loan Terms & Benefits
Construction loans differ from traditional mortgages in key ways. Unlike standard mortgages, which provide a lump sum at closing, construction loans disburse funds incrementally throughout the building phases. These draw schedules are based on inspections and project milestones, ensuring proper cash flow management.
Some benefits of construction financing include:
- Customization & Control: You dictate the quality and features of your new home.
- Interest-Only Period: Lower payments during construction help maintain financial flexibility.
- Loan-to-Cost Financing: Cover both land and construction expenses under a single mortgage.
- Exit Financing Options: Convert your construction loan into a long-term mortgage upon project completion.
We also assist with understanding the costs associated with construction loans, including closing costs, inspection fees, and potential construction holdbacks.
Why Choose Us for Your Construction Mortgage?
Expert Guidance
As your dedicated mortgage advisor in Ontario, we provide comprehensive support through every stage.
Competitive Rates
Secure the best mortgage rates, whether for construction loans or long-term financing.
Tailored Solutions
Customized financing options designed to fit your project's unique requirements.
Seamless Process
We handle everything from loan application and draw schedules to final mortgage conversion, ensuring a stress-free experience.
Start Your Construction Project Today
Building your dream home or vacation property is a significant investment, and securing the right financing is key. Contact our Ontario mortgage brokerage today to explore the best mortgage rates and personalized financing solutions. Our experienced mortgage advisors are here to guide you through the process, ensuring you have the right loan structure for a successful build.