CONSTRUCTION MORTGAGES
(A BUILDER's MORTGAGE)

A construction mortgage is a specialized loan designed to finance the construction of a new home or major renovations to an existing property. Unlike traditional residential or commercial mortgages, construction mortgages offer flexible, phased funding, aligning with the progress of your building project.

✅ Why Work With A Mortgage Broker?

A mortgage broker can simplify the complex process of getting a construction mortgage by:

Accessing multiple lenders to find flexible draw schedules and competitive rates
Guiding you through staged financing and inspection requirements
Helping with paperwork, approvals, and builder qualifications
Ensuring the mortgage aligns with your construction timeline and budget

Their expertise saves time, reduces stress, and helps avoid costly mistakes during your build.

✅ Key Features of a Construction Mortgage:

🔹 Staged Financing (Draw Mortgage Structure):
Funds are released in multiple draws, with each stage of construction unlocking the next portion of your approved financing. These stages typically include:

Land acquisition
Foundation completion
Framing
Lock-up stage (installation of doors and windows)
Project completion

🔹 Progress Inspections:
Before each draw is released, an independent inspection is conducted to confirm that the current phase of construction is complete and meets lender standards.

🔹 Higher Down Payment Requirements:
Since there’s no completed property to act as collateral, lenders typically require a larger down payment compared to traditional residential or commercial mortgages.

🔹 Interest-Only Payments During Construction:
In many cases, borrowers make interest-only payments during the construction period, helping to reduce financial strain until the project is complete.

🔹 Conversion to Traditional Mortgage:
Once construction is completed and the home is move-in ready, the loan is often converted into a conventional mortgage with fixed or variable terms.

🏠 Who is it for?

Custom home builders
Investors developing new residential units
Homeowners planning major renovations or additions

🏞️ GET FINANCING TO BUY LAND FOR CONSTRUCTION

If you're planning to build a new home or develop a property from the ground up, securing financing for the land purchase is a critical first step. A construction mortgage in Canada can provide a first advance to help you purchase vacant land, even before construction begins.

✅ Land Financing Options:

🔹 Already Own the Land?
If you already own the land, the first advance can be structured as an equity take-out, allowing you to access a portion of the land's value to finance the construction phase.

🔹 Need to Buy Land?
If you have not yet purchased the land, many lenders offer a first advance to assist with the acquisition of a vacant lot, provided your overall construction financing plan is approved.

🛠️ How It Works:

Pre-approval required: You'll need to submit a complete construction budget, building plans, and builder agreement.
Appraisal of vacant land: The lender will assess the land's value and approve a percentage for the initial advance.
Draw mortgage structure: After the land purchase, additional funds will be released in phases as construction progresses.

🏗️BUILD A HOME ON LAND WITH A BUILDER’S MORTGAGE

If you're planning to construct a custom home on a vacant lot, a builder’s mortgage—also known as a construction draw mortgage—is the ideal financing solution. This specialized loan provides funds in phases, known as “draws”, aligned with the stages of construction.

🔹 How a Builder’s Mortgage Works:

Staged Draws: Funds are advanced in increments as each phase of construction is completed—such as foundation, framing, lock-up, and final completion.
Interest-Only Payments During Construction: While your home is being built, most lenders require interest-only payments on the amount drawn, keeping your monthly costs lower during the build.
Final Payment Upon Completion: The remaining balance of the mortgage is typically due at project completion, when the home is ready for occupancy.

✅ Key Advantages:

Helps manage cash flow during long construction periods.
Financing is customized to your building schedule.
Access to professional inspections and appraisals during each stage.
Reduces upfront financial pressure by deferring full mortgage payments.

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CONSTRUCTION MORTGAGES
(A BUILDER's MORTGAGE)

✅ Why Work With A Mortgage Broker?

✅ Key Features of a Construction Mortgage:

🔹 Staged Financing (Draw Mortgage Structure):
Funds are released in multiple draws, with each stage of construction unlocking the next portion of your approved financing. These stages typically include:

🏠 Who is it for?

🏞️ GET FINANCING TO BUY LAND FOR CONSTRUCTION

✅ Land Financing Options:

🏗️BUILD A HOME ON LAND WITH A BUILDER’S MORTGAGE

✅ Key Advantages:

CONSTRUCTION MORTGAGES (A BUILDER's MORTGAGE)

✅ Why Work With A Mortgage Broker?

✅ Key Features of a Construction Mortgage:

​

​🔹 Staged Financing (Draw Mortgage Structure): Funds are released in multiple draws, with each stage of construction unlocking the next portion of your approved financing. These stages typically include:

🏠 Who is it for?

🏞️ GET FINANCING TO BUY LAND FOR CONSTRUCTION

✅ Land Financing Options:

​

🏗️BUILD A HOME ON LAND WITH A BUILDER’S MORTGAGE

✅ Key Advantages:

CONSTRUCTION MORTGAGES
(A BUILDER's MORTGAGE)

🔹 Staged Financing (Draw Mortgage Structure):
Funds are released in multiple draws, with each stage of construction unlocking the next portion of your approved financing. These stages typically include: