Looking for a construction mortgage?
Speak with a mortgage broker who can help you get your buiders mortgage.
Looking to build your dream home? Not everyone wants to buy an existing house. Some people prefer to have a brand new house constructed instead. If you’re wondering if there’s a mortgage for building a house, the answer is: Yes!
A construction mortgage allows you to draw down on the full amount of the mortgage at predetermined stages of the home construction. Let us explain.
Construction mortgages are given on a progress advance basis. The full amount that you need to borrow, in order to complete your construction, is given to you in stages – otherwise known as “draws” – as you complete various levels of completion.
If you already own the land you want to build on, a first advance is available as equity take-out. If you have not yet bought the land, a first advance is available to assist you with the purchase of a vacant lot.
Speak with a mortgage broker who can help you get your buiders mortgage.
Below is common draw schedule used by lenders:
Draw Stage | Required Building Completion | Construction Stage | % of Total Mortgage Amount Advanced |
---|---|---|---|
1st Draw (Optional) | 15% complete | Excavation and foundation complete | 15% |
2nd Draw | 40% complete | Roof is on, the building is weather protected (i.e. airtight, access secured) | 25% |
3rd Draw | 65% complete | Plumbing and wiring is started, plaster/ drywall is complete, furnace installed, exterior wall cladding complete, etc. | 25% |
4th Draw | 85% complete | Kitchen cupboards installed, bathroom completed, doors have been hung, etc. | 20% |
5th Draw | 100% complete | Ready for occupancy with seasonal and exterior work completed | 15% |
Speak to a mortgage broker about construction mortgages.