Office: 905-841-7344 Cell: 416-566-7344

iStock_000001810968XSmallConstruction Financing For Custom Home Building

  • Construction Financing is advanced in draws;
  • Rates begin at 8% Interest Only 1st mortgage
  • Rates begin at 10% Interest Only 2nd mortgage
  • Broker and Lender fees are usually around 4% of the loan amount.
  • Present Value (PV) and Future Value (FV) are important benchmarks we use to determine your construction draws;
  • You must have equity in the land and at least 25% equity in the Present Value (PV) at all times. Including after you demolish any house currently on the property;
  • The loan is interest accrual, no monthly payments;
  • The loan is typically advanced in 4 draws;
  • I calculate the draws based on your equity and budget;
  • If you hired a General Contractor (GC) then they must be approved by the lender;
  • If the house is a new build and you plan to sell, it must be under warranty with Tarion.
  • You need Builder All Risk insurance for the project;
  • Your GC must provide proof of liability insurance;
  • Your personal and property taxes must be paid up to date;
  • Draws are advanced when work is in place, completed satisfactory and passed inspection.
  • I only deal with one Lender at a time. Until the Lender says “no”, I won’t move on. Its bad business to shop your deal all over town.
  • If you don’t have enough cash to begin the project then we can advance on a cost to complete basis direct to trades.

On the average it takes a couple weeks to get financed if it’s a fairly straightforward