Depending on the size of the construction project, there can be a number of members to the construction lead such as a builder, architect, lawyer, interior designer, landscaper, general contractor, and so on. One potential team member that can be over looked or never really added is the construction mortgage broker.
While every person or project is different, the basic rationale I see most often with not having a mortgage broker recruited into a construction team is that construction financing is basically an on demand commodity that can be arranged once everything else has been arranged or prepared for the project.
And while this may be true in some situations, the majority of construction projects would benefit from actually getting a construction mortgage broker involved in the project sooner or later for a number of key reasons.
First, any project planning is going to be based on the amount of capital that will be required to complete the work. If the construction financing is only sought at or near the end of the project and fails to deliver the amount of fund required, the project may have to be quickly adjusted to work with the money available which can incur more costs and potential delays. The longer the lead time, the more time available to create a financing strategy that will meet the needs of the project and be incorporated into the project so that start point for actually beginning work can take place on time and within budget.
Second, when there are course corrections to the project either from changes in scope, construction cost over runs, or changes in regulatory guidelines that will impact the budget of the project, a construction mortgage broker who is working with the project team is already up to speed on the overall project profile and can then more quickly react to any changes that may need to be made to the approved construction financing mortgage, or to acquire additional sources of funds before they are required.
Third, if there are any administrative issues with draw advances that crop up, having a construction mortgage broker on your team that already has a working relationship with the lender or capital provider can increase the speed in which problems can be solved and additional costs avoided via unnecessary delays.
If you have a construction project that you’re thinking about or planning out, I would welcome the opportunity to discuss the details with you and see if there is a fit for my services on your construction team.