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Construction Financing
BUILDING IT YOUR WAY
BUILDING IT YOUR WAY
If you’ve been dreaming about a major renovation or building your ideal home, we can help you get the money you need to make it happen. Our flexible construction financing deals can be structured to provide timely draws, helping you complete your project on time and on budget. Let our team of mortgage professionals help you through the process and negotiate the best possible terms and rate from our construction financing lenders.
TYPES OF CONSTRUCTION MORTGAGES
1. A progress-draw mortgage is used to fund the build and allows the builder to draw money throughout the building process. It’s a short-term mortgage of 4-12 months, depending on the lender, at a rate of prime plus 1-3 percent with interest only payments. The loan is dispersed in increments, with an inspection required before each draw throughout the building process to ensure that things are on schedule and done properly. If the build doesn’t pass inspection, the builder doesn’t get the next payment.
2. A completion mortgage is used once the build is complete and you take possession. It is typically arranged 30-45 days before construction is completed. The total amount taken in the progress draw is paid out and combined with the new completion mortgage for the negotiated term of 3, 4, or 5 years.
Getting approved for a construction mortgage is certainly more complex than a typical home mortgage because each lender may have different requirements or limitations that can make or break the deal. We can help you understand the process and will position the deal with key information that lenders look for.