I get asked sometimes if there is any special or specific advantages to financing a construction project in Toronto compared to the surrounding area or places further away.
The reality is that there is a much higher concentration of construction lenders in Toronto than pretty much anywhere else in Canada. And the better the project, the more options that are going to apply. Even weaker deals are more likely to attract construction financing in Toronto due to the strength of the local real estate market.
For the stronger deals, rates are also going to be better as there will likely be competition among both bank and private lenders for more solid and lower risk deals.
Toronto based deals can also generate higher loan to value ratios at times compared to areas immediately outside the GTA.
Just remember that while you may be able to attract more construction mortgage lender attention, that doesn’t mean that Toronto based lenders are going to be any easier to deal with when it comes to requesting your draw advances, especially the institutional lenders. Regardless of where you’re located, the devil is always in the details when it comes to construction draws.
The keys to getting the best deal will always depend on giving yourself enough time to explore available options and being fully prepared for the information that’s going to be required by the type of construction financing you’re targeting.
Leaving things too long in any market, or going in semi prepared is going to make the process of securing construction financing more difficult, so basically the fundamentals are always going to apply. But at the same time, there can definitely be some distinct advantages of having your construction project located in Toronto or at least in the Greater Toronto Area, depending on the type of project you’re working on.
If you’re trying to arrange construction financing for a Toronto based project, I suggest that you give me a call so I can quickly assess your options and provide relevant Toronto construction financing options for your consideration.