Toronto Construction loan basics are pretty much what’s going to be required for any type of construction loan in Toronto or anywhere else for that matter. If you want a construction mortgage lender to approve your project for construction financing, in the time you have to work with, then its going to be important to have the basics in place.
Failure to provide the fundamental information will get you declined and also waste time.
Here are the core things that all construction loan providers are going to what to see or know are in place prior to considering your application.
First, is the land owned and in control of the borrower and are the necessary licenses and permits for the proposed project in place? This is step one and without it, everything else you can provide is theory as it all depends on control and permission being granted to the owner, builder, or developer.
Second, do you have a detailed and complete set of building plans and drawings. A picture is worth a thousand words and failure to be able to clearly describe and outline your project can make it difficult for a lender to understand what exactly you’re trying to accomplish.
Third, make sure that you have a detailed and accurate project budget and time line of implementation. For all the numbers being provided, try to have as much supporting information as possible. For instance, all significant budget items like contracts and material supplies should be supported by signed agreement or written quotations.
Fourth, be clear as to the equity you either have in the project or will put into the project if equity is required. If you have it in the project, you should have a recently completed appraisal to support the current value of the property. If you’re going to invest it in the project, then you should be able to show proof of funds.
Fifth, outline who is going to be doing the building and/or general contracting, their resume, other credentials, and their contract.
Going in with the basics will allow you to get the lenders attention and move forward with the application process even if there are a few other things not yet available.
If you have a construction project you’re working on that will require a Toronto construction loan, give me a call so I can assess your requirements and provide construction financing options for your consideration.