Construction Financing
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Our guide on Construction Financing Mortgages in Canada!
Building a new home or undertaking a significant renovation can be an exciting but stressful time, especially when it comes to financing the project. That’s where construction financing mortgages come in.
What is a Construction Financing Mortgage?
A construction financing mortgage is a type of mortgage that provides funding for the construction of a new home or significant renovation project.
Unlike a traditional mortgage, where the full amount is given upfront, construction financing mortgages are released in stages as the construction progresses. The lender will typically release the funds in instalments, known as draws, after specific milestones are met.
How Does a Construction Financing Mortgage Work?
Construction financing mortgages work differently than traditional mortgages. Instead of a lump sum payment, the funds are disbursed in installments based on the project’s progress. This method of payment is called progress draws, and they are typically paid out in three to four installments:
- The first draw is issued at the start of the project to cover the initial expenses, such as purchasing land or preparing the site.
- The second draw is paid once the foundation is complete and inspected.
- The third draw is paid once the framing, wiring, and plumbing are in place and inspected.
- The final draw is paid once the project is complete and the final inspection has been passed.
It’s essential to work with a lender who has experience with construction financing mortgages. They can help guide you through the process, ensure that the draws are paid out correctly, and that the project is on track.
What Are the Benefits of a Construction Financing Mortgage?
A construction financing mortgage provides many benefits to those who are building a new home or undertaking a significant renovation project:
Flexibility
Construction financing mortgages are flexible and can be customized to suit the needs of your project. The draw schedule can be adjusted to accommodate your specific needs, and the loan amount can be tailored to fit your budget.
Lower Payments
Unlike traditional mortgages, where the full amount is given upfront, construction financing mortgages only require payments on the funds that have been disbursed.
Interest-Only Payments
During the construction period, you only have to pay interest on the funds that have been disbursed. This can help to reduce your monthly payments and free up funds to be used elsewhere.
Increased Control
With a construction financing mortgage, you have greater control over the construction process. You can ensure that the project is completed to your specifications and that the quality of the work is up to your standards.
Conclusion
Construction financing mortgages are an excellent option for those who are building a new home or undertaking a significant renovation project. They provide flexibility, lower payments, interest-only payments during the construction period, and increased control over the construction process. If you’re considering building a new home or undertaking a significant renovation project, contact us today to learn more about construction financing mortgages and how we can help you finance your project.
We Offer A Range of Solutions For All Your Second Mortgages Needs!
A home equity line of credit or HELOC is a line of credit taken out by a borrower to access the equity in their home. The amount you can access is based on the amount of available equity in your home, which is determined by subtracting the appraised value of your home relative to any existing mortgages. The more equity you have available, the larger the line of credit amount you can qualify for. Whatever the reason you have is for needing to access your equity, HELOC loans are a great solution that allow you to access equity with flexible terms and payment options.
Why Choose Burke Financial
At Burke Financial, we specialize in communicating with lenders on behalf of our clients and delivering the best techniques and resources to combat a Power of Sale in Ontario. When it comes to protecting your home and your family, we leave no stone unturned. Our Mortgage brokers are available on-hand to put a stop to this process and ensure you remain in your home.
We are a customer service leader, and we’re committed to creating a positive and stress-free experience for our clients. Your home is an essential part of your story, and you deserve to continue writing.
Don’t stress over losing your home. Let the experts help. Get in touch with Burke Financial today.
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Frequently Asked Questions
Mortgage brokers are licensed financial professionals that have the resources to find the lowest rates and the appropriate payment plans for their clients. Working with a broker will save you time and ensure you get the best possible deal.
A mortgage broker acts as the middleman between you and the extensive paperwork involved on your behalf for a set fee. They are often able to foresee problems that could arise during the application process and tailor your application based on what each lender needs.
The role of a mortgage broker is to act as a connection between the borrower and the lender to secure a loan on behalf of the individual or their business. Their responsibilities include negotiating rates, dealing with the paperwork, and facilitating an agreed-upon loan and payment plan
One of the most significant benefits of working with a broker is their extensive network, as they have the tools and resources to identify and obtain the loan that will fit your needs.
A mortgage broker compiles a homeowner’s financial documents, accesses their credit history, and confirms current and past employment to present an application to multiple lenders. They help negotiate the terms and conditions of your payment plan and, once the loan is agreed, will work with the lender to ensure a smooth and efficient transaction.
Mortgage broker fees in Ontario vary based on your unique situation and the solution you are seeking. Contact us today for a more personalized estimate of what you can expect your fees to be.
Owning a home is an investment that deserves detailed attention and care. When unexpected expenses occur, or you need to consolidate your debts, it’s essential to find the right broker to step in and offer a solution tailored to your financial needs. We operate with a vast network of lenders, including subprime mortgage lenders across the province, and we’ll work diligently to find the right match for our clients.
At Burke Financial, our mission is to give homeowners across Ontario the best possible borrowing experience through a high level of service and expertise.
When you work with us, you’re working with an award-winning team that specializes in getting even the toughest of applications approved. We’re putting money in your pocket faster, so you can invest in your future.
Burke Financial offers mortgage broker services, with a specialty in subprime mortgages, across the province of Ontario.
At Burke Financial, we know that each homeowner’s experience is unique. We offer a personalized approach and help connect our clients with subprime lending options across Ontario. From day one, we treat each interaction with our clients as a chance to change their borrowing experience to a positive one.
We take the time to understand what our clients are looking to accomplish with their applications. We personalize short-term and long-term solutions to help our clients achieve long-term financial health.
We look at our client’s main priorities to make sure we shape the optimal payment amounts, term length, prepayment privileges, interest rates, and much more. We know how important it is to align our clients with reasonable rates and terms and educate them on areas like an exit strategy to make sure they are always on the right path.
As an industry-leading Mortgage Brokerage, we leverage our vast network of banks, institutions, MICs, private lenders, and investors to connect our clients with some of the best lending options.
Even if your credit score is below 650, our vast lending network allows us to deliver approvals for even the most complex applications. We believe every homeowner deserves to make the most of their home’s equity. We negotiate on your behalf and shop your application to multiple lenders to get you the most competitive rates and terms.
With our quick turnaround times, we can put money in your pocket in as little as 48 hours. Our goal is to deliver the best possible results for our clients and deliver them fast!
Communities We Serve
We provide service throughout all of Ontario with a focus on the following cities:
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