Construction Mortgage Ontario
Construction Mortgage Ontario: Interest only payment over the construction time. 80% of Land value for first draw – or we help you purchase the land outright.
Two options to Build Your Dream Home
- Self Build – Typically when the homeowner is coordinating the build with independent contractors and when the owner is not a licensed builder.
- Managed Build – When the entire project is coordinated and overseen by a licensed home builder who also registers the home with TARION.
General Details for Self Build or Managed Build Construction Mortgage
- Self-Build financing applications must include cost estimates and evidence that the borrower has the necessary experience to complete the project
- Managed Build applications must also provide a portfolio for reference and to prove experience.
- Typical documentation includes:
- Insurance coverage
- Building permits
- Appraisal / inspections
- and final inspection.
Benefits of our Construction Mortgage
- Throughout construction the mortgage is INTEREST only payments until either the interest adjustment date is reached – or the property is 100% complete
- Only ONE registration for the mortgage regardless of the stage of advances
- UNLIMITED DRAWS. First 4 Draws are free. $100 fee applies for over 4 draws.
- Switched to a typical residential mortgage with current best rates at the end of construction.
Process for financing
- Require estimates for
- Shell Stage
- Services (Hydro/Gas)
- Well / Septic or Municipal hookup
- Flooring / Drywall & Finishes
Restrictions & Cost.
- Property must be residential.
- Follow construction contract for builder mortgages/ 6 months for self-build.
- First advance is maximum 80% of the land value or land purchase price.
- Initial advance used to purchase the lot or start construction.
- Max fee is .85% of the mortgage but capped at $3000. (eg: $350,000 mtg = $3000 fee)
Study: Home East of Stouffville.
- Client had 100k to build their dream home.
- Land Price was 500k, estimated build cost 500k.
- Purchased land with 100k down, we financed 400k.
- Client drew money 5 times at each stages and finished project in 6 months.
- Client only paid Interest of 3.49% of the actual amount borrowed.
- We switched Client to a 5 Year Variable at 2.20% at the end of Construction.
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