Building Your Home & Construction Financing

Your Home Construction Financing Journey

Building a home offers a great opportunity to tailor your house to your preferences, and if you’re able to contribute to the construction work, it can also be a way to build equity by reducing labor costs.

Construction mortgages play a vital role in facilitating the construction process by providing funds through various stages of the project. However, compared to a regular home purchase, or buying directly from a builder, constructing a home involves more planning and paperwork.

What Does a Construction Mortgage Require?

Deed or Offer to Purchase for the Lot

This establishes ownership of the land where the construction will take place.

Copies of Plans or Blueprints

Detailed architectural plans outlining the construction.

Detailed Construction Cost Summary

Supported by quotes from contractors, this outlines the anticipated costs.

Building Permit

A necessary document for construction approval.

Builder’s Risk Insurance Policy

To protect against potential risks during construction.

Upon receiving the plans and estimates, an appraisal is conducted to determine the final value. If you already own the land, it is considered part of your equity, allowing access to typically 50% of its value for startup costs. Additional savings or accessible funds are also required to reach the first draw stage.

For those purchasing a home directly from a builder, a construction mortgage may not be necessary, as funds are only required upon completion. However, if you buy the land and then hire a general contractor or plan to manage the construction yourself, it is considered a self-build. In this case, multiple draws are required throughout the building process.

Navigating the various financing options and understanding the process is crucial for those considering construction financing. Through our Mortgage Agents/Brokers, we provide support every step of the way, offering assistance in outlining fund disbursements, arranging inspections and appraisals, and ensuring cash flow at each stage of construction. This commitment aims to provide peace of mind throughout the new build or construction financing process.

Get In Touch

1330 Mid-Way Boulevard, Unit #1
Mississauga, ON L5T 2K3 Canada

(647) 525-4005

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Sat: Closed
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Mortgage Alliance - LIC # 10530