Toronto Condo Construction Financing

Joe Walsh — Mon, 07 Jun 2010 13:32:49 +0000

“Keys To Consider When Seeking Toronto Condo Construction Financing”

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.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Toronto Condo Construction Financing first appeared on Ontario Construction Loans And Mortgage Financing.

Condo Construction Loan Approvals

Joe Walsh — Fri, 30 Apr 2010 21:15:57 +0000

“Construction Loans for Residential and Commercial Condo Projects Are All About The Pre-Sales”

If you’re planning out a residential or commercial condominium project, remember that the single most important element of an application for construction financing is going to be the pre sales you have in hand and the marketing plan you have in place for the remainder of the units.

Of course the lender is going to look at the plans and post construction appraisal which will also be important, but without a significant number of presales, its unlikely that your project will get any serious lender consideration from construction financing sources providing the better rates.

How many presales will depend on the project and the amount of resale mark up that is built into the resale price. A general rule would want to see the total value of pre sold units to exceed the projected cost of production plus 20%. In this way, both the builder and the lender know the project can cover its cost before construction even begins.

So depending on the percent market up over cost, there can be some significant variation to the number of pre sale units a lender wants to see.

This example is far from a hard and fast rule for establishing what amount of presales are sufficient at the outset of the construction phase. Some lenders may have an absolute percentage sold while others will assess on a case by case basis.

And presales that count are ones where signed documentation between the seller and prospective buyer is in place and a deposit held in trust. Construction mortgage lenders will also be interested in the terms and conditions of the pre-sale agreements to get comfortable with the level of commitment that is created.

The on going marketing program for the remaining units will also be of interest so that a comfort level can be achieved as to how much effort will continue to be applied into the sales process until all or most of the units are committed.

By having the construction project well mapped out in terms of costs, contracts, drawings, time lines, permits, and pre sales, the construction financing process will be completed much faster and you’re going to be in a position to be considered for better terms and rates.

Click Here To Speak With Construction Mortgage Expert Joe Walsh

The post Condo Construction Loan Approvals first appeared on Ontario Construction Loans And Mortgage Financing.

condo construction loans | Ontario Construction Loans And Mortgage Financing

Toronto Condo Construction Financing

“Keys To Consider When Seeking Toronto Condo Construction Financing”

Condo Construction Loan Approvals

“Construction Loans for Residential and Commercial Condo Projects Are All About The Pre-Sales”