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If you’re planning a construction project on an existing home or commercial property, or if you’re in the middle of an addition or renovation, a private second mortgage may be the best source of capital to fund the work involved.

There are a number of reasons for this.

First of all, if you don’t have enough available credit through, say, a home equity line of credit or unsecured lines of credit, then you’re going to need to get an incremental source of capital to pay for all the costs.

If you need to access the equity in your home to generate the capital required and you already have a first mortgage on the property, your options are going to be to refinance the first mortgage or get a second mortgage in place.

And typically a bank will not provide a construction loan in a second mortgage position, so a private second mortgage can be a very good option.

In terms of refinancing the first mortgage, you may not want to do that based on the interest rate you’re currently paying, and the prepayment penalties that may be incurred from refinancing.

Once again, a private second may be the best solution you have available to you.

There are also private lenders that have a focus in construction that have no issue going into a second position on your property so the availability of financing is going to be similar to what you would likely be able to find from institutional lenders in the local market.

A construction loan secured by a private 2nd will also allow you to borrow against the future value of the real estate instead of just the present value.

So if the “as complete” appraisal of your project provides for a higher market value for your property, the construction financing can allow for this and provide a larger amount of capital than a conventional second mortgage or home equity line that will only be based on the current or pre construction value of the property.

As mentioned above, money will be advanced in draws so it will be important to have a cash flow payment schedule that aligns with the draw schedule provided by the lender.

That being said, private construction loans tend to have very predictable draw administration processes in that you can expect to be provided a certain amount of money from the mortgage approval when a certain stage of work is completed.

This is not always the case with a bank or institutional construction loan where the draw advance process can encounter administrative delays as well as draw reductions if the lender’s third party appraiser determines that there is more work to complete that funds available after a full draw advance is made.

Once the work is complete, you will still need to repay the construction loan and that may be with a new institutional second if you still do not want to refinance your first mortgage.

Any new financing will be based on the updated market value of the property as well, which will reflect the value added through the construction process.

If you’d like to know more about construction financing via a second mortgage, please give me a call so we can discuss your situation together and go over the relevant options that are available to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

Construction Financing Home

The post Private Second For Renovation Or Addition first appeared on Ontario Construction Loans And Mortgage Financing.

Commercial construction loans are typically arranged for specific phases of a construction project.

For instance, its not uncommon that a separate loan is required for each of land acquisition, site development, and the actual building construction.

Each stage of the project will likely increase the value of the overall project, providing a basis for future financing events.

But the main reason for requiring multiple types of commercial construction loans relates to the financing risk associated with each event with also impacts the cost of construction related financing.

Another way of looking at this is that there is no guarantee that a construction project will advance from phase to phase on a timely basis, or at all. So for each financing event, there is typically a short timeline to completion and a completion of value added work or at least clarity as to the value of the project once borrowed funds are invested.

For the lender that is prepared to extend funding for the land purchase, the lender is making a borrowing decision based on the current market value of the land and if development work does not proceed immediately or at all, the borrower has a clear view of the resale market for that project.

Same line of thought applies to someone providing land servicing and site development financing. Not only are they well versed in the draw management requirements of this type of funding, but also all the regulatory requirements that need to be in place prior to any work being done. And once the borrowed funds have been invested in the project, the market value will have increased and provide a broader range of exit strategies to the lender. But at that point of completion, there is still no guarantee to a lender that the building phase will progress any time soon or at all, so once again, financing tends to be arranged on a phasing of the work basis.

This also allows lenders to be extended into a project for a shorter period of time, and even if a lender is prepared to fund multiple phases, its not uncommon that the construction mortgage gets rewritten to pay out the existing debt and provide for the work required in the next stage with rates and terms associated with the risk of the next step.

The key point here is that the coordination of commercial construction loans among different phases of a project can be considerable and difficult to manage.

As a result, you would be well advised to be working with an experienced construction mortgage broker to not only source the funds when required, but to also set up a fully integrated financing strategy for the whole project so the builder, developer, or property owner can seamlessly move from one phase to the next without financing delays.

A construction mortgage broker is also invaluable during the construction project with helping both sides complete the borrower and lender requirements as well as being involved in the facilitation of solutions to any problems that may occur with the financing arranged and the related cash flow management.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Commercial Construction Loan Options

The post Commercial Constructon Loans first appeared on Ontario Construction Loans And Mortgage Financing.

Retirement home construction financing is available through our broad network of construction lending sources.

Construction loans for retirement homes can be for both new builds as well as renovations and additions.

Sources of financing for retirement home loans basically fall into three different categories.

We refer to the lower risk, lower rate category as banks and other name brand institutional lenders. The cost of financing will be the lowest from this group, but in turn the time to arrange financing can be considerable, depending on the project, and the lending/funding criteria is also harder to meet.

The second group is what we describe as quasi institutional where the source of money may be from an investment banking group, a hedge fund, or some other form of organized capital that does not have a branded presence. The funds from these sources tend to be slightly higher than banks and institutional lenders, but the higher rates tend to provide for higher risk as well which can make these sources a great alternative to the banks. This group of lenders also tends to move a lot faster in terms of the application process, but still will require full disclosure before committing to any funding opportunity.

The third group consists of private mortgage lenders that have a focus in construction financing. The private lenders that fund construction are in the very small minority of private mortgage providers in general. But even as a small number of lenders, they can still provide a considerable amount of capital for retirement home projects. And while private lenders will lend to be more expensive, there also tend to be much more streamlined in their lending/funding process and draw advance process. In addition, private lenders can be an excellent source of construction bridge financing if incremental capital is required before the project is completed.

The key in arranging retirement home construction financing is to align the financing requirement up with the right lending source so that their is no time or money wasted arranging funding, and so that all relevant timelines can be met.

The best approach to getting the right retirement home construction loan arranged is to work with an experienced construction mortgage broker who has access to these different groups of lenders and who can properly advise you as to where your needs will be best met.

If you are currently planning a retirement home project that will require construction financing, or if you are in the middle of a retirement home build that needs more capital, I suggest that you give me a call so we can quickly go over your requirements and provide discuss retirement home construction financing solutions that can meet your needs in the time you have to work with.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Retirement Home Construction Financing Options

The post Retirement Home Construction Financing first appeared on Ontario Construction Loans And Mortgage Financing.

Toronto Home construction loans can be placed through a number of different lenders and lender categories.

The key is to make sure that you’re matching your requirements to the lender’s funding criteria and construction loan terms so you’re not only getting a good value in terms of cost of funding, but making sure that the funds provided are going to be predictable and on a timely basis.

The two main categories for Toronto home construction loans are from bank or institutional lenders, and from private mortgage lenders.

Bank and institutional lenders are going to be the potential lowest cost option from an interest rate charged point of view, but that doesn’t always translate into the lowest overall cost of financing once all the dust is settled and the project is complete.

There can also be some significant differences from the home construction financing program provided by one institutional lender compared to another.

The private mortgage financing option is on the surface more expensive in terms of the stated interest rate on the construction mortgage.

But once again, home construction loans provided through private lenders aren’t automatically going to be more expensive once all the related costs are factored in to manage the construction financing from beginning to end.

For instance, some of the major benefits of private mortgage financing for Toronto home construction loans is that the approval process is faster than what you will expect from a bank or institutional lender, the draw process is more dependable and predictable, and you don’t necessarily have to have your take out mortgage or long term funding in place before the construction project is underway.

In order to be able to truly take advantage of the potential lower cost financing provided by a bank or institutional lender, then you have to 1) allow more time to qualify for construction financing, and to administer the construction draw process; 2) have an alternative source of funding available in case their are any draw reductions or delays in draw advances during the construction period.

To figure out which category of home construction loans and which specific lender in one of the two categories is going to be the best fit for your specific project and cash flow requirements, I strongly recommend that you work directly with an experienced construction mortgage broker from start to finish so that you always have the information at hand, and the coaching available, to make the construction financing decision that’s best for your family.

If you have a Toronto home construction loan requirements right now, or are planning a project in the near future, I suggest that you give me a call so we can go over your requirements and discuss potential construction financing options that would be a good fit for your needs.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Toronto Construction Loan Options

The post Home Construction Loans first appeared on Ontario Construction Loans And Mortgage Financing.

There are three basic scenarios where private mortgage financing gets used for financing the construction projects of builders, developers, and property owners.

The first scenario is where the private mortgage is a preferred choice over a bank or institutional construction loan. Especially in the case of builders or developers that have utilized both bank and private mortgage financing for their construction projects, many will choose to use private mortgage financing more often than not due to the speed of getting financing in place, and the predictability of the draw schedules.

Even at a slightly higher cost, the benefits received can far out weigh trying to save a few dollars of interest on a construction loan.

The second scenario is where someone has started out with a bank construction mortgage and run into problems getting draws advanced somewhere during construction. Unfortunately, this is not an uncommon situation and can require the borrower to seek construction financing quickly from another funding source, which invariably is a private mortgage lender that provides construction financing.

The third scenario is when the project runs over budget for some reason such as an unexpected cost or a change in scope, and more capital is going to be required to finish the work.

Because the project is likely near or close to completion, the risks associated with a construction project have been greatly reduced and the work completed has added value to the real estate available for security.

So the situation provides for an equity based mortgage that can sit behind the existing first and potentially second mortgages already in place.

Some of the keys to these construction bridge loans is that a small amount amount of money is required for a short amount of time, providing a fairly low risk financing decision for a private mortgage lender.

Another key to construction bridge financing is that typically the money needs to be put into place in a hurry and private money lenders that make these types of loans are set up to assess and fund the deal in a two to five business day period.

Regardless of the situation you find yourself in, the best way to access a construction loans is through a construction mortgage broker who has direct access to private mortgage lenders that are prepared to fund construction projects at all different stages.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Private Mortgage Options

The post Private Mortgage Construction Loans first appeared on Ontario Construction Loans And Mortgage Financing.

“Make Sure You Can Access Commercial Construction Financing For Your Next Project Before You Get Too Far Into It”

It’s not a given that a commercial construction loan is going to be forthcoming for any type of project you may choose to undertake. Or even if you can secure a construction loan, the rates and terms can be considerably skewed depending on the project.

Remember that for most construction lenders, the focus on their lending decision when it comes to construction loans is what the end market value for the project is likely going to be, and in unlikely event that the lender had to take over the project before completion, how hard would it be to market the project in the short term in order to reclaim the funds advanced.

At any period of time, there are projects that have stronger market demand than others. The better rates and terms, leverage, and lender choices will follow around those projects. From a builder or developer point of view, less capital will need to be invested in these projects with a higher potential profit margin due to lower cost of financing.

On the flip side, building against the current can not only result in larger down payments and a higher total cost of borrowing, it can be hard to locate a source of construction financing at all. This can delay or potentially kill a project that’s already had some money put into it.

The best solution to guard against a lack of construction financing or rates and terms you can’t live with is to start the financing process early before you spend money or enter into binding commitments. Select an experienced construction mortgage broker who can help you navigate the market and potentially introduce you to sources of construction financing you hadn’t previously thought of or were aware of. Getting a mortgage broker working for you can also allow you to focus more time on project planning versus spending all your time hunting for construction financing

The key here is to not assume that money will always be available to you, when you require it, for any and all types of projects. And even if there are lenders that can finance your project, make sure you have left yourself enough time to find them before you start incurring any type of delay costs.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Commercial Construction Loans Can Be Project Dependent first appeared on Ontario Construction Loans And Mortgage Financing.

“Woodstock Construction Loans For All Phases of Most Commercial And Residential Construction Projects”

A Woodstock construction loan is most commonly required for funding building construction. But construction financing can also be required for financing requirements immediately before or after the building phase.

For instance, the first type of funding required for many construction projects is a land acquisition loan to acquire the property where the construction is going to take place. If the property being acquired is bare land, then land development funding may be required to improve the land and install the infrastructure required prior to building construction.

In self build construction project scenarios, when the construction work is completed, a long term construction take out mortgage is required to consolidate all the property and building costs into one long term mortgage facility.

Other types of construction financing requirements are construction bridge loans to cover off changes in project scope or cost over runs that can result before the project is completed. These types of construction loans are typically provided by private mortgage financing sources due to the speed in which they can be put into place which can be as quick as two to five business days, depending on the project and the amount of money required.

For condo projects, its not uncommon for the builder or developer to require a condo inventory loan at the end of the construction process but before condo certification has been granted. This provides the cash flow necessary to fund the project until condo sales can be completed.

For larger commercial and/or residential construction projects, the property owner or developer may require mezzanine funding to support the debt financing requirements of the project and keep the balance sheet ratios in order.

Woodstock construction mortgage financing is available from both bank and private lending sources depending on the capital requirements of the project at any given phase of construction. For some projects, there may be a combination of institutional and private mortgages required during the life of the project to properly fund the work. This is where it can be very beneficial to be working with a construction mortgage broker who has access to a wide variety of construction financing sources.

If you require a Woodstock construction loan, I suggest that you give me a call so I can quickly assess the financing requirements for your project and then provide relevant construction mortgage options for your consideration.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Woodstock Construction Loan first appeared on Ontario Construction Loans And Mortgage Financing.

“Toronto Single Family Construction Loans From Bank and Private Mortgage Sources”

Toronto single family construction loans are the most common form of construction financing provided in the market each year and what may surprise some is that the most common form of single family construction mortgages is private mortgage lending.

The lowest cost form of financing for single family construction where its a self build situation is through a bank or institutional lender. The requirements are fairly strict and its not automatic that everyone will qualify partially because you have to be able to qualify for both the construction loan and the take out mortgage prior to construction starting as institutional lenders will not provide construction loans unless they can secure the more lucrative long term mortgage at the end of the project.

If you’re interested in an institutional construction loan, you should consider using a mortgage broker versus trying to do it yourself with your own bank. The process can be fairly involved and its easy to get tripped up when trying to meet all the requirements let along dealing with the draw administration process. The added assistance of an experienced construction mortgage broker can make all the difference in not only getting the deal funded but helping you work through any issues that arise with draw advances during the life of the project.

Toronto single family construction loans through private lenders are typically easier to secure and there is seldom the need for the take out mortgage to be arranged at the same time as the construction loan providing more time to the builder or home owner to shop around for the best available long term mortgage later on in the project.

Private mortgage lenders also tend to have more straightforward and predictable draw schedules although you can still have problems with cash flow management with these funding sources as well.

Regardless of what type of construction financing lender you want to go with, a construction mortgage broker is going to be a major asset in locating the most suitable lender, helping you get the commitment in place, and assisting in the draw management process so if any issues do arise they can be dealt with quickly before they impact the project in terms of cost and time.

If you require a Toronto single family construction loan, give me a call so we can review your requirements together and discuss relevant construction loan options that meet your criteria.

Click Here To Speak With Toronto Construction Mortgage Broker Joe Walsh

The post Toronto Single Family Construction Loans first appeared on Ontario Construction Loans And Mortgage Financing.

“Georgina Construction Loans Are Available For All Phases of Commercial and Residential Construction”

Georgina construction loans are most commonly placed for single family home construction but we also place financing for larger residential and commercial projects as well.

But just in terms of sheer numbers, single family construction loans are obviously the most common among builders, home owners, and developers.

For self build scenarios where bank or institutional construction financing is preferred, we can help you locate the best available program for both your construction and take out mortgages as both will need to be approved prior to construction by any institutional lender.

That being said, the vast majority of construction loans for smaller residential projects is provided via private mortgage funding sources due to the fact that in most cases a long term take out mortgage can be arranged later on providing the borrower or builder to have longer to shop around for financing and secure the best available deal. Private mortgage construction loans typically are also easier to get approved in the first place with less stringent draw administration as well which are just some of the reasons why many borrowers actually prefer private financing despite a higher cost of borrowing.

For commercial projects, we will work on placing construction funding for any phase of construction including land purchase, site work, building construction, take out, condo inventory financing, long term take out mortgages, mezzanine funding, and construction bridge loans.

Each phase of construction may require either a bank or private mortgage funding source, so its important to be working with a construction mortgage broker who can access a broad array of potential lenders to secure whatever type of Georgina construction loan that may be required.

Most construction projects typically have two to three different construction or construction related loans during the life of the project so its also important to make sure that all staged funding is arranged on a timely basis and that there is a seamless (or near seamless) transition from one source of funding to another in order to keep the project on track.

If you are seeking Georgina construction loans for a project being planned or one that you’re in the middle of, I suggest that you give me a call so I can quickly assess your needs and provide suitable construction mortgage options for your immediate consideration.

Click Here To Speak With Construction Mortgage Broker Joe Walsh.

The post Georgina Construction Loans first appeared on Ontario Construction Loans And Mortgage Financing.