For construction finance services in Toronto and surrounding area, we facilitate the placement of both institutional and private construction mortgage solutions.

Our clients are typically a builder, developer, or property owner looking from construction finance for a residential, commercial, or industrial project.

The nature of the construction finance request can range from financing for a piece of bare land prior to the start of construction, to a take out mortgage at the end of the project to repay the actual building loan.

More specifically, we provide construction financing for the following construction financing activities: land acquisition, site development, building construction, construction bridge loans, construction inventory financing, and long term take out mortgages.

If bank or institutional construction finance is something you are specifically after, we work with a number of different bank and institutional lenders that provide construction financing products.

The key with securing a construction finance facility with an institutional lender is understanding their lending requirements so that time is only spent contacting and working with lenders that are the best fit for your project and are more likely to be in the market for what you’re looking for.

Many times individuals will become frustrated with the sometimes overwhelming administrative process that can come along with a bank or institutional construction loan application and seek out our professional assistance to guide them through the process versus wasting time and money trying to figure everything out for themselves.

On the private mortgage financing side, we have relationships with several private mortgage lenders in Ontario that provide different types of private mortgage loans, so if private lending is more your preferred option for construction finance, then its likely we will be able to provide options for your consideration.

Overall, most of the financing requests we receive end up choosing private mortgage financing over bank financing for their construction finance requirements due to the flexibility the can come from a private mortgage lender. While there is going to be a slightly higher cost of capital, the benefits that come with private mortgage lending tend to more than make up for it.

Regardless of what your construction finance requirements or preferences are, we would welcome the opportunity to discuss your project with you along with the different financing strategies that may be available to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

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

As I’ve written many times, its not uncommon for a construction project to require three or more separate construction financing or construction loan events during the lifetime of a project.

Knowing that going in can allow you to properly set up and arrange and administer the construction financing for each phase of the project.

Too often, the builder, especially for one time or first time build situations, tends to just put one foot in front of the other and only looks after the immediate need without any real consideration of how what gets arranged today can impact the financing that is going to be required down the line.

The key to construction financing is to have a phase of work completed at a time where the money invested into the project is sufficient in scope and amount to significantly increase the market value of the overall real estate, which then provides the basis for additional funding to be secured for the next stage.

In order to accomplish proper construction financing, the construction loan amount and draw schedule for each phase of work has to match up with with the projected market value. If there isn’t some type of reconciliation to funding and work to be completed and ending market value, then the project can become under funded and stuck looking for additional equity capital from somewhere.

One of the ways to avoid a poor construction financing plan in the first place is to start and stay working with the same construction financing broker throughout the process. This continuity in the overall process can pay big dividends during the life of the project. Too much fragmentation among different brokers and lenders can lead to considerable cash flow management problems that should be avoided at all reasonable costs. A experienced construction mortgage broker is going to help you focus in both on the big picture as well as moving the project through some of the administrative things that can hang it up in the draw management process.

If you’re in the middle of a construction project or planning construction financing for your next build, I suggest that you give me a call so we can discuss your requirements and outline a plan that will provide complete and timely funding.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Construction Financing – Start With The End In Mind first appeared on Ontario Construction Loans And Mortgage Financing.

“For Big or Small Projects, Construction Mortgage Brokers Can Be The Key Element For Successful Construction Financing”

When I spend the time to go through the construction financing process with potential clients, its not uncommon that the individual(s) don’t believe me when I talk about all the different things that need to be managed and all the things that can go wrong with construction financing, especially when there are two or more construction mortgage elements to manage during the life of the entire project.

Its also not uncommon that the same people come to me in the middle of the project or after the dust has settled and said they should have paid more attention to what I was trying to tell them.

Construction financing can be a tricky process to manage once the commitment is in place. And the more people involved on both sides, the more likely there are going to be challenges to get draws advanced on time and for the requested amount.

The one component that can make or break the way the cash actually flows is the ongoing involvement of the mortgage broker. For me, finding and securing the construction loan for any stage of the project is only the beginning of the work involved. After doing this work for over 30 years, I have come to appreciate that a good mortgage broker needs to be monitoring the progress of the project and needs to get involved to help smooth out any issues that may arise in the administration process between the borrower and the lender.

And from a relationship point of view, this is not only a value added service on my part, but a way to keep both my customers happy. That’s right, both the borrower and the lender are my customers. If a construction loan falls apart for whatever reason, its going to be more difficult for me to utilize the same lender in the future as I’m going to be linked to that bad experience whether that’s justified or not. And from the borrowers point of view, I want the client to be my customer for a long time and to tell others about how well we worked together through the project.

If you end up working through a broker who has no appreciation of this dual customer relationship, don’t expect to get a whole lot of useful help if you run into cash flow problems during the project. And if you’re working with a lender directly, you truly are on your own.

Of all the different types of mortgages I work to arrange, construction financing is by far the most challenging and one in which the mortgage broker’s role can many times prove to be invaluable.

Click Here To Speak To Construction Mortgage Broker Joe Walsh

The post Mortgage Brokers Can Be Key To Construction Financing first appeared on Ontario Construction Loans And Mortgage Financing.

“Here Are Some Typical Interest Rate Ranges For Different Types of Construction Financing Mortgages”

Construction loans are basically provided from three mortgage lender classifications and three mortgage registration positions, each impacting the risk to the lender and rate to the borrower.

In terms of mortgage lender classification for construction loans, there are the major banks, secondary banks, and private lenders.

The major banks tend to own the institutional construction financing in larger centers for residential and commercial properties as they will finance these deals at 2 to 3 percent over the prime rate.

The secondary banks and credit unions will provide more construction financing in more rural or less prime market area where the major banks have less interest and will provide construction mortgages more in the prime plus 4% to 6% range.

The third category, which is also the largest category for construction loans, is private mortgage lenders. Private lenders will provide construction loans for 8% to 10% on both residential and commercial properties.

These rates, which can still vary outside of the ranges mentioned, are related to a first mortgage position on the property.

Institutional lenders do not typically provide construction mortgage financing in a second position on a property unless the first mortgage is very small in relation to the value of the property prior to construction. But when a construction loan is issued in a second position, the construction loan rate is going to go up by approximately 2% on average.

The same is true of private mortgage construction loans in that the higher the mortgage registration position, the higher the interest rate on the construction loan. And unlike institutional construction mortgages, many private construction loans are registered in a second position against the title of the property after the land or site acquisition mortgage. In some cases where the equity is high enough and the overall project considered to be well suited for a strong real estate market, the private mortgage lender may even consent to providing a construction loan registered in a third position on title.

Similar to the institutional construction financing requirements, a second mortgage position on a private construction mortgage will command an interest rate increase of approximately 2% from what would be offered in a first mortgage position and a construction mortgage provided in third security position may command an interest rate increase of 4% to 8% above what would be charged for a first mortgage registration against the subject property.

Remember that these are only general guidelines you can apply to get a feel for what certain lenders and mortgage registration positions will charge and that the actual rates will vary by lender and construction project.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Construction Financing Interest Rates first appeared on Ontario Construction Loans And Mortgage Financing.