“Waterdown New Home Construction Loans Are Available From Bank and Private Lending Sources”

Waterdown new home construction loans and mortgages are pretty common these days with all the different construction projects and developments going on in the area.

Most of the construction financing is being acquired by developers and builders completing property holdings for sale to the public. And for builders, property owners, or developers, we provide a variety of construction loan types including builder loans, land development mortgages, and construction bridge financing.

For the individual home owner looking for a Waterdown new home construction loan, there are also a number of options to choose from. Many people will first try to arrange construction financing through their own bank which is a logical first step. But if they fail to qualify, then a private mortgage construction loan is likely going to be the next most likely option.

Most people don’t realize that private mortgage construction financing is considerably larger than bank construction loan programs on the whole. This is due mostly to the fact that with a private construction mortgage for a new home build, the take out or long term mortgage that consolidates the construction and land costs at the end of the project does not typically need to be in place at the start of the project. In the case of a bank construction loan, both the construction financing and the take out mortgage must both be approved prior to the commencement of construction. This is because the bank or institutional lenders will only provide construction loans for new home builds if they can secure the longer term mortgage at the end of the process.

With private mortgage construction financing, the long term or take out mortgage can be sourced out after construction has begun in most cases, providing the property owners with more time and flexibility to locate the best deal available to them on the market.

Regardless of the type of lender you choose to go with (bank or private), it would be a good idea to work with a construction mortgage broker that can not only help you locate the best construction financing fit for your project, but also help you with both the application and loan administration process that goes with it.

If you are in need of a Waterdown new home construction loan, give me a call and we’ll go over your available options together.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post New Home Construction Loan first appeared on Ontario Construction Loans And Mortgage Financing.

“Keys To Retirement Home Construction Loan Financing”

Even though retirement home construction loan financing is quite common these days, especially with the growing demand for this type of housing, construction financing can be difficult to arrange.

While higher ratio institutionally insured mortgages backed by CMHC are possible to obtain, many projects struggle to qualify for the level of funding that’s required.

The main reason for this is the challenges the project faces with satisfying the repayment assessment and post construction valuation of the construction mortgage lender and/or the mortgage insurance provider.

Retirement homes are valued for financing based on the estimated market value at the point of completion. Because the market valuation is dependent on the revenue producing ability of these types of assets, it becomes more difficult to establish value with no historical financial performance available.

In many situations, a newly constructed retirement home will not fill up the available occupancy for one or two or more years, potentially providing a cash flow shortage for debt servicing a large mortgage that was used to build the facility in the first place.

The key to getting the largest potential retirement home construction loan is by having a large percentage of units presold or committed (depending on the business model) at the beginning of construction so that the revenue projections can reflect stronger year one cash flows that are supported by solid commitments to occupy or own.

This is not an easy task to accomplish but one that is becoming more and more of an issue with retirement home construction projects. Unless you have an alternative source of revenue that you can pledge towards the debt servicing of the project, it may be difficult to qualify for the retirement home construction financing required unless the unit or occupany marketing is mostly completed prior to the project commencing.

There are private mortgage construction financing options for these projects as well, but they are going to also rely on the repayment strategy of the construction loan and will be more focused on the geography of the project, favoring those projects in more densely populated areas.

If you require a retirement home construction loan I suggest that you give me a call so I 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 Retirement Home Construction Loan first appeared on Ontario Construction Loans And Mortgage Financing.

“Here Are The Different Types of New Home Construction Loans And Their Related Requirements”

New home construction loans are typically either provided for a home builder that is building out lot inventory for the purposes of resale, or for a self build scenario where the eventual home owner finances the project all the way through construction.

For home builders, new home construction loans will require the builder to provide home owner insurance and have sufficient equity in the project to support the construction loan amount. If the builder owns a number of lots or even additional property, a lender can take real estate that is unrelated to the construction project as security.

The key elements for home builders is the equity they have in the project or can provide in the form of other real estate security, and the sale status of the home being built. If the home is pre-sold subject to the completion of construction, there are going to be more construction financing options available versus scenarios where builders are creating inventory for future resale.

For self build scenarios, new home construction loans can be secured through major banks and mortgage companies provided that the borrower is able and prepared to qualify for both the construction loan and the long term take out mortgage at the same time.

For the most part, banks don’t do construction loans unless they can get the long term mortgage asset as they are otherwise not interested in the risk associated with construction projects.

If a self builder can’t qualify for both construction financing and take out loan through their bank or similar institution, then they can apply for a new home construction loan via a private lender.

This can also be a benefit in that the private may be able to provide a higher loan to value ratio than the bank and the private lender may not require you to have the take out mortgage in place before construction begins, giving you more time to shop around for the best deal.

If you’re a builder, developer, or property owner looking to do a self build project for a new home, give me a call so I can quickly assess your requirement and provide relevant new home construction loan options for your consideration.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post New Home Construction Loans first appeared on Ontario Construction Loans And Mortgage Financing.