Are you looking for a construction loan to start a new custom-built house? There’s a different path forward than getting a more traditional mortgage.
Following are some boxes you need to check to provide the proper assurances. Remember, these types of loans have higher risks.
A Detailed Construction Plan.
If you’re looking for a detailed design of the house you want to build, you’ll need to contact an architect or design professional. These experts can put together floor plans and elevations. Remember that a detailed construction plan needs to include all the different elements of construction, including any contingencies, and a clear and detailed timeline for each phase of the process.
All the details must include start and completion times for different project parts, including roofing, framing and foundation laying.
Strict Lender Requirements for A Construction Loan
Lenders will also require documents like building contracts, relevant permits and even insurance policies from the builders. Remember that where necessary, you’ll need to include a copy of the survey report finished by a licensed surveyor.
A Drawdown Structure
Lenders want the most control possible in these construction loans. A well-designed drawdown structure tells any lender that the project is moving ahead, and the money is being used properly.
Applicants should work with a builder to develop a schedule that aligns with critical milestones. The schedule highlights when the funds are needed for foundation work, framing, and other construction phases.
OMJ Mortgage Capital Inc. It is a boutique broker located in Toronto. We will gladly help you get a construction loan to build your dream home. Contact us today to learn more about our efficient, compassionate process.
