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.