Richmond Hill home builder loans for self build construction projects or single family home construction performed by a builder or developer can be acquired from a number of different sources depending on what your borrowing criteria area and your credit profile.
For self build home construction loans, most banks and institutional lenders have programs designed specifically for this purpose, but also have very specific qualifications and requirements to follow. This can be both a good and bad thing. Good thing in that its clear what the programs entail, what you need to qualify, and how the administration is structured. Bad thing in that complying with all the requirements can be difficult at times before, during, and after the initial application period and approval process is over.
Banks and institutional lenders will also provide home builder loans for professional builders, contractors, and developers who will be the actual borrower until the home is sold. Depending on the program, financing can be secured for a pre-sold single family home or a home that the builder will put into inventory for resale. Each situation will have different requirements from the lenders point of view.
The biggest difference between bank and institutional home builder loans in Richmond Hill and in other areas is that the self build version requires the owner to also qualify for the long term take out mortgage at the same time they apply for the construction financing. This assures that the mortgage lender will be able to secure the long term mortgage into their portfolio for many years to come versus making a smaller amount of money on a construction loan that lasts a few months. With a builder loan, there typically will not be the requirement for the take out mortgage as the builder or developer is the actual borrower and will not be holding the take out mortgage at the end of construction.
The most popular form of construction financing is private mortgage construction financing for both self build scenarios and professional builder loans. Private mortgages cost more, but also less administratively intensive to deal with an easier to get draws funded for the most part.
The key to figuring out which Richmond Hill home builder loan option is best for you is to work with an experienced construction mortgage broker that has a successful track record placing these types of mortgages.
If you need a Richmond Hill home builder loan either for a self build scenario or professional builder situation, I suggest that you give me a call so I can quickly assess your options and provide home builder loan options to consider.