The current mortgage market is continually changing the way we need to approach getting construction take out mortgages in place.
With most of the construction financing provided by private mortgages, there typically can be a fair amount of time to shop the market for the best long term mortgage deal as many private lenders don’t require you to have the take out in place at time of construction, especially if you’re in well established residential market areas.
But that line of thinking is quickly changing as the mortgage rates start to inch up and are expected to increase over the short term. Waiting until the end of the project to get the take out mortgage in place could end up costing you more in the longer term if rates move against you.
So it makes more sense to spend the time at the beginning of the project to try and get both the construction loan and the long term construction take out mortgage arranged at the same time.
Even if you don’t have time to get all the details of a long term mortgage figured out right now, you can at least make an application and get a rate secured for the next 120 days. If you can complete the project by that time, then you will have at least one solid option to consider if rates move higher in the interim period.
Typically, the construction mortgage is the more difficult of the two mortgages to be approved for anyway, so if you’ve gone through all the work to prepare your construction budgets, get a post construction appraisal completed, and assembled the basic application, you might as well go the extra step right now and apply for the take out mortgage as well.
If your project is starting right away and you’re pressed for time to shop around for the rates and terms you’re looking for, then take advantage of the services of a mortgage broker to do most of the work for you.
That way, you don’t have to compromise your project management time while still being able to get the long term mortgage arranged as soon as possible.
If you have a construction project you’re about to start or are in the middle of that will require a take out mortgage, please give me a call so I can quickly assess your requirements and provide relevant options that we can go through together.