Building a home from the ground up is an exciting journey that many may dream of but aren’t sure how to make happen. As a mortgage broker, I help clients navigate the process of securing financing for a new build.
Getting a construction mortgage gives you the opportunity to create a space that fits your lifestyle, your family and your future. But financing a custom home build is very different from purchasing an existing property. That’s where working with me comes in. The right guidance can make the process straightforward and manageable.
A construction mortgage, sometimes called a progressive draw mortgage, is designed for building a new home or undertaking major renovations. Instead of receiving the full mortgage amount upfront, funds get released in stages as construction progresses.
These stages, known as draws, align with key milestones in the building process. This ensures the lender is financing work as it is completed, while also helping to manage risk throughout the project.
While there are different lenders that provide construction mortgages, a typical draw schedule will look something like this:
At each stage, an appraiser or inspector confirms the progress before the next draw is released.
Construction mortgages are structured differently from conventional financing. If you’re looking to build your dream home, it’s important to understand the key features of a construction mortgage.
Once the construction build is complete, the mortgage will be converted to a standard mortgage.
If you’ve gotten a mortgage in the past and know the process, it’s much different. Qualifying for a construction mortgage requires more documentation than a traditional home purchase.
Lenders want to ensure the project is financially viable and that the build will be completed as planned.
Every situation is different, and it’s important to discuss on the phone whether you will qualify. With clients who have gone through with this type of mortgage, typically, the lenders need the following:
Most lenders also require a contingency reserve, often around 15% of total construction costs, in addition to your down payment or equity contribution.
Construction financing comes with unique responsibilities. For example, borrowers are typically required to contribute their own equity first before lender funds are advanced.
You’ll also need to account for lien holdbacks, as required under provincial legislation, and ensure sufficient funds remain available to complete the project at every stage. Lenders will want to ensure that these subjects are completed before approving you for the mortgage.
Working with an experienced builder and an informed mortgage broker is essential to avoiding delays or unexpected challenges.
Construction mortgages require careful planning, lender expertise, and a clear understanding of the building process. That’s where I come in!
I work closely with clients and lenders to ensure every detail is in place before construction begins. From reviewing your budget and determining your financing options to coordinating the draw schedule and arranging your long-term mortgage upon completion, I’ll guide you through each step.
My goal is to make the financing process as smooth and stress-free as possible, so you can focus on bringing your vision to life.
A construction mortgage provides the flexibility and structure you need to turn your plans into reality.
I’d be happy to help you explore your options, understand the process, and secure the financing that fits your project. If you’re ready to start your dream build, reach out to me today. Give me a call at 250-826-3111, apply through my website, or contact me via my online contact form.
Let’s get your application off the ground.
