“Construction Loan Advances Are Not Likely To Take Place Until The Proper Zoning and Property Use Permits Are in Place”

Its not uncommon that construction loans are arranged while a property rezoning, severance, right of way, or special use permit is being applied for through the appropriate governing body. Its also not uncommon that the related process can take significantly more time that you think it will, delaying the advance of any construction loan funds.

The reason why this is important is because the related property value and lender security may depend on the completion of the property zoning or registration that is required. Without the revised status in place, the property value can be worth significantly less and the construction building permit invalid.

This scenario typically applies to bare land purchases, site development work, or building construction.

For instance, with a bare land purchase of agricultural land, a rezoning to residential or commercial use needs to be approved prior to any building or development taking place. But even at the property buying stage, the a mortgage will only be made available for the value of the property at the time of purchase. If the agricultural land is worth $1,000 an acre and the rezoned property is appraised at $10,000 an acre, the lending value is going to be 1/10 the rezoned value until the process is complete.

Many times property owners and developers will purchase the land with the expectation of rezoning to follow soon after. Construction mortgages can even be arranged subject to the completion of the rezoning or other land title change requirement. But because these processes can become political in nature, multi step in structure, they can also become highly unpredictable. As a result, its important to make sure not to put the horse in front of the cart and progress too far into a construction project until the property classification and use requirements are either in place or close to completion.

Getting too aggressive can not only incur unnecessary delay costs but can also cause the construction mortgage lender to lose patience in waiting for the property requirements to be met, resulting in mortgage funding being lost in some cases, or the rates being revised due to the time that’s gone by.

Click Here To Speak To Construction Mortgage Broker Joe Walsh

The post Construction Mortgages Depend On Property Regulations first appeared on Ontario Construction Loans And Mortgage Financing.

“Here Are Three Key Steps To Getting Toronto Construction Financing In Place For The Terms and Rates You’re After”

When looking to secure Toronto construction financing for an Ontario based residential or commercial building project, you need to break down the construction financing procurement process in these three steps.

First, you need to make sure you’re applying to the most relevant construction mortgage lenders. All projects are going to have their own best supply fit and the sooner you zero in on the right audience, the faster construction financing will fall into place.

Second, once you’ve gone through the initial application process and found a construction mortgage lender that is prepared to commit to your project, you’re going to need to negotiate and finalize the conditions of a funding commitment. This is a step where lots of good funding opportunities fall to the way side due to the two parties failing to reach final agreement. Each project can have unique requirements and each lender will have its own funding policies, so its not a given that even though both parties are mostly in agreement that a final consensus on terms and conditions will emerge.

The last stage is actually getting the construction loan provider to issue a draw request. Before the first draw is advanced, the construction financing source does not have a vested interest in the project and can hold off advancing funds indefinitely if the lender does not feel that all the terms and conditions of funding have been properly met. Its not a given by any stretch that just because a signed commitment to fund a construction project is in place that funding will actually flow when its supposed to or at all.

Until all three steps have been complete, there is no Toronto construction financing. And because funding can fall apart at any point, there is always risk that there will be construction financing problems.

To increase your probability of both securing and getting a construction loan funded, its highly recommended that you work with an experienced construction mortgage broker that has experience navigating through all the things that can go wrong during the construction financing procurement process and help keep both your budget and time line on track.

Click Here to Speak To Toronto Construction Mortgage Broker Joe Walsh

The post Three Steps To Getting Toronto Construction Financing first appeared on Ontario Construction Loans And Mortgage Financing.

“Advantages To Locating And Securing Construction Financing In Toronto”

I get asked sometimes if there is any special or specific advantages to financing a construction project in Toronto compared to the surrounding area or places further away.

The reality is that there is a much higher concentration of construction lenders in Toronto than pretty much anywhere else in Canada. And the better the project, the more options that are going to apply. Even weaker deals are more likely to attract construction financing in Toronto due to the strength of the local real estate market.

For the stronger deals, rates are also going to be better as there will likely be competition among both bank and private lenders for more solid and lower risk deals.

Toronto based deals can also generate higher loan to value ratios at times compared to areas immediately outside the GTA.

Just remember that while you may be able to attract more construction mortgage lender attention, that doesn’t mean that Toronto based lenders are going to be any easier to deal with when it comes to requesting your draw advances, especially the institutional lenders. Regardless of where you’re located, the devil is always in the details when it comes to construction draws.

The keys to getting the best deal will always depend on giving yourself enough time to explore available options and being fully prepared for the information that’s going to be required by the type of construction financing you’re targeting.

Leaving things too long in any market, or going in semi prepared is going to make the process of securing construction financing more difficult, so basically the fundamentals are always going to apply. But at the same time, there can definitely be some distinct advantages of having your construction project located in Toronto or at least in the Greater Toronto Area, depending on the type of project you’re working on.

If you’re trying to arrange construction financing for a Toronto based project, I suggest that you give me a call so I can quickly assess your options and provide relevant Toronto construction financing options for your consideration.

Click Here To Speak To Construction Mortgage Broker Joe Walsh

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