If you’ve been considering a major renovation or building your perfect home, we can assist you in getting the money you need to make it happen. Our flexible construction financing is designed to provide timely draws and help you in completing your project on time and budget. Let our team of mortgage experts assist you through the process and negotiate the best possible terms and rate from our construction financing lenders.
There are two types of Construction Mortgages
- Progress-draw mortgage is used to finance the build and lets the builder draw money throughout the construction process. It’s a short-term mortgage of 3-12 months, depending on the lender, at a rate of prime plus 1-3 percent with interest-only payments. The loan is divided into increments, with an inspection needed before each draw throughout the construction process to ensure that things are on time and done properly. If the build doesn’t pass inspection, the builder doesn’t get the next payment.
- Completion mortgage is a process in which the buyer takes out the full mortgage at the completion of the building. The money is used once the build is completed, and you take ownership. It is arranged 30-45 days before the building is completed. The total amount taken in the progress draw is paid out and combined with the new completion mortgage for the settled term of 3, 4, or 5 years.
Getting permission for a construction mortgage is certainly more complex than a typical home mortgage. Contact us today, and we will help you understand the process and will position the deal with crucial information that lenders look for.
