Construction Financing Process
Here’s The Process For Applying And Securing Ontario Construction Loans
The construction financing process starts with an assessment of your project funding requirements and your own financing profile.
We perform this process by a personal interview either in person or over the phone. I don’t believe in getting you to fill out an online form for this purpose as many times your first answer leads to a new question not covered in these online application forms you see, resulting to very incomplete application and sometimes irrelevant applications.
The nature of construction financing is such that each loan is really customized lending so the idea of automatically collecting your information and sending it out to 25 different lenders may work in theory, but its not a practice we see much value in.
The goal is to tightly match your requirements and financial profile to the most relevant lenders so that you’re considering the most relevant options as soon as possible and not wasting your time on lenders and construction mortgage programs that are likely a weaker fit for your project.
Where possible, we recommend that the take out mortgage also get arranged at the time the construction building loan is arranged so that you won’t be left scrambling for long term mortgage financing at or near the end of the construction project.
The overall process that we follow and manage on your behalf can best be summarized into the following steps:
- Initial assessment of requirements and financing profile
- Listing of the construction project elements required for the application
- Preparation of the application package
- Application submitted to targeted lender groups
- Follow up on lender questions and information requirements
- Review lender terms and conditions with you.
- Complete the paper work to get a signed commitment in place.
- Work with your team to manage the draw schedule.
- Problem solve any issues that may occur during the project.
- Coordinate the payback of the construction loan through a take out mortgage or other means.
The steps in the process and the actual work required at each step will vary by project type and related circumstances. So even though the overall process is quite similar from project to project, there is a certain amount of customization that takes place because no two projects are ever totally alike.
The real key to managing the entire construction financing process is to work with a construction mortgage broker and support term that are not only good at finding and securing the capital you require, but are also highly focused on customer service and issue management.
Any type of construction has a certain amount of risk and unpredictability to it. The more prepared you are at managing through the inevitable issues that arise, the smoother you’re project will end up progressing.
As an extension of your team, we are committed to working through whatever issues may arise relating to cash flow and financing during your project. This is a value added benefit of working with me and my team that we believe sets us apart from other brokers or financing consultants.