Most construction loan agreements are written with a timeline for you to utilize the funds.

If you run out of time before the project is completed, even if for some unforeseen reason that extended the construction process, its going to be important to understand how you deal with this.

The best way to deal with any construction loan timeline is to make sure that whatever is agreed to between yourself and the lender is far in excess of what you will need for time, even when factoring in the unforeseen.

The next step is to make sure that you have the ability to extend the period or have an option to extend, and outline what the costs of an extension would be.

In the event that you do run out of time and there is no chance for an extension, then you should also clearly understand at the outset what the cost is going to be to potentially be breaking your long term take out mortgage if its connected to the construction loan and if you are forced to go elsewhere for the rest of the required construction financing.

While the expiry of the funding period doesn’t happen very often, it does occur and the result can not only be disruptive to the overall construction project, but costly to resolve.

One of the ways to deal with an expiry of the construction loan advance period is to get a construction bridge loan in place from a private mortgage lender.

If you have gotten a long ways into the project already, there will likely be an significant increase to the property value from the work completed, which can allow a private mortgage lender to go behind the existing construction loan in the mortgage registration cue and put a second or even third mortgage in place to provide the capital required to complete the project.

The smaller the amount of money required, the easier its going to be to get a construction bridge loan into place.

And if the project is close to completion, the private lender due diligence will likely be minimal, allowing you to get incremental funding in place in a matter of days.

Of course the best approach is to avoid the need for any additional constructions loans in the first place and this is accomplished by making sure your project plan fits the timelines provided by the lender plus some allowance for contingency time. And if you still are running out of time, that you have options to consider with the original construction lender that will be acceptable to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Construction Loan Time Limit first appeared on Ontario Construction Loans And Mortgage Financing.

“The Supply of Ontario Construction Loans Is Always More Challenged In The Prime Building Season”

We are now into July of 2010 and the construction financing season is into full swing.

With construction starts growing month over month for the last several months, the number of projects under way will start to impact the available sources of construction financing in certain areas.

Remember that the majority of Ontario construction loans come from private mortgage lenders and this category of lender, unlike a bank or institutional mortgage provider, has more of a finite supply of capital available to fund construction projects at any given time.

And with private mortgage construction financing being more specific to region and project type, there is a greater chance than supply will start to get constrained in the summer months compared to other times in the year.

That being said, there is no risk of the market running out of Ontario construction financing. But in certain areas for specific projects, the supply can become periodically constrained creating more opportunistic pricing for lenders who are prepared to lend in those areas.

Similar to any commodity market, supply and demand will impact pricing and terms of sale or terms of financing in this case. As a result, you could end up paying higher rates than you need to if you can’t find better construction financing options in the time available.

To make sure that you get the construction loan you’re looking for, the best approach is to work with a Ontario construction mortgage broker who covers both your area and the type of project you’re working on. Mortgage brokers that are more focused on construction financing will have a larger supply of relevant private lenders than mortgage brokers that place the occasional construction mortgage loan.

Construction mortgage brokers will also tend to work with private lenders that cover a broader geography. So if your local construction financing sources dry up or start to jack up their pricing, private lenders from outside the immediate area may be your best option.

But to access them, you’re going to have to be working with a construction mortgage broker covering your area.

If you’ve got a construction project in Southwestern Ontario that your planning or in the middle of, I recommend that you give me a call so I can quickly assess your situation and provide relevant Ontario construction loan options for your consideration.

Click Here To Speak To Construction Mortgage Broker Joe Walsh

The post Ontario Construction Loans In High Demand first appeared on Ontario Construction Loans And Mortgage Financing.