The Construction Loan
Applying for a construction loan is much more complicated than the average mortgage loan. Here are the most common questions that people have when I speak with them and the answers to those questions:
- HOW MUCH? RATE and FEES: Rate and fees are relative to the lender. Typically cost of borrowing is around 8%.
- MORTGAGE PAYMENTS: Construction loans are interest accrual. That means that you don’t make monthly payments, the interest is calculated and deducted from the construction draws.
- HOW MUCH CAN I BORROW FOR CONSTRUCTION?: It depends on the present and future value on completion. A good rule of thumb is 75% of the future value.
- HOW DO WE GET STARTED? Call 416-566-7344 and lets discuss your project.
- DO I HAVE TO GIVE A BIG DEPOSIT?: NO!! But we do generally ask for enough deposit to cover legal fees.
WE WILL NEED THE FOLLOWING INFORMATION BEFORE CONSTRUCTION DRAWS ARE RELEASED TO THE PROJECT:
- Building Permit
- Appraisals (sometimes not necessary)
- Stamped Drawings
- Mortgage Application
- Hard cost construction budget and approved draw requests (to be negotiated and inserted into the commitment).
- Builder All Risk Insurance policy
- Site Inspection Hilchuk, Principal Broker – Licence # 11962
I Finance Construction – Corporate Licence # 11296, specializing in construction financing and private mortgages since 2009 plus 30 years experience in custom home building, general contracting and many many contacts with private lenders and General Contractors.
Our Commitment to You:
Honesty, Integrity and Experience to help you achieve the most from your project!