top of page

Construction Mortgages

Construction Mortgage vs
Conventional Mortgage

A construction mortgage is a type of mortgage that is used to finance the construction of a new home or renovation of an existing one. It differs from a regular mortgage in that funds are released in stages as the construction progresses.

 

Qualifying 

To qualify for a construction mortgage, you will need to provide detailed plans and costs for the construction project. Like a conventional mortgage, you will also need to provide standard income  documents, identity,  as well as meet the lender's income and debt requirements

Completion Mortgage vs
Progress Draw Mortgage

 A Completion Mortgage is a type of mortgage where the full loan amount is advanced to the borrower after the construction is completed. Completion Mortgage is usually used in situations where the construction is already completed. The full loan amount is given to the borrower after the construction completion.

A Progress Draw Mortgage releases a portion of the loan amount at each stage of the construction process, instead of the full amount at the end. There is generally 5 stages or draws, 65% of the land value, 40%, 65%, 80% and 100%. This helps the borrower receive the money incrementally as the project progresses.

bottom of page