Here at Source Mortgage, we have the honour of working with clients who have a variety of needs and goals. Because of this experience, we specialize in all different types of mortgages; including construction loans. This type of loan covers the cost of the construction of your home.
Completion Mortgage VS Progress-Draw Mortgage
There are two types of construction mortgages:
- Completion. In this case, the loan isn’t transferred until construction is complete or the homeowner takes possession. Completion mortgages allow homeowners to make changes to their mortgage up until 30 days before the possession date.
- Progress-Draw. Alternatively, a progress-draw mortgage allows the builder to draw money throughout the building process. The loan is dispersed in increments as opposed to being given in a lump sum at the end.
Factors to Consider:
Our experts will help you determine which type of construction loan best fits your needs. Another component of the equation, like any mortgage, is monthly payments. Construction cases are unique because you will likely be paying to live somewhere else during the build. Because of this, it is even more important to keep expenses manageable.
Qualifying for a construction loan is very similar to a regular mortgage in that you will need to provide your basic debt, income and asset information. On top of these documents you will need to supply a signed construction or purchase contract with your builder or developer. Once all of this information is collected, we will start building the agreement.
Construction loans can include a number of different elements, depending on the borrower’s needs. For example, for those purchasing the land they are building on, their loan can involve an initial loan payment. As experienced mortgage brokers, we can work with you and potential lenders to tailor the loan to fit your unique situation. Regardless of the other terms, our construction loans cover both the construction phase and the permanent financing to make the process as convenient as possible.
If your dream home is just waiting to be built, don’t settle for anything less. Your first step in securing a construction loan is to talk to the mortgage experts at Source Mortgage. We can’t wait to hear from you!