Locating and securing Toronto condo construction loans depends on a number of factors including project type, location, point in time, and time available to get construction financing in place.
From a project type point of view, the design, price range, and demand for residential or commercial condo units will influence the number of interested construction mortgage lenders. Condo projects get financed based on the number of pre-sales the builder or property owner has in hand with the minimum requirement varying by project and lender.
Location will also play into lender interest within different areas of Toronto and the overall Greater Toronto Area as well.
2010 is a good example of how a point in time can have an impact on locating and securing construction financing for any large project. We are currently working through the most recent economic recession and even though housing starts are up overall, condo starts are down across the country including the GTA. Construction mortgage lenders are taking a more cautious approach with larger projects with less banks and institutional lenders going to be interested in any one particular deal than during a stronger economic period.
This also leads into the amount of time you have available to get things arranged. For the stronger condo construction projects in the market, there are still going to be great rates and terms available for construction financing. But in order to secure the best potential deal, you’re going to need to have enough lead time to work through what can be very extensive and exhaustive qualifying processes that low cost construction lenders will require.
If you have a good project and time is getting short, there are typically very strong secondary options still providing institutional rate levels but also possessing the ability and desire to move faster that the major banks or cheapest forms of money.
And if time is truly of the essence, a private mortgage construction financing option may need to be considered to keep a project’s time lines on track versus incurring significant delay costs or contract breech while trying to locate lower cost sources of financing.
If you have a Toronto condo construction financing requirement, I recommend that you give me a call so we can quickly assess your requirements and provide relevant construction financing options for your consideration.