Construction Loan Application Requirements
“Here’s a List of The Primary Information Required by Construction Mortgage Lenders For Both Residential and Commercial Projects.”
Before you apply for construction financing, here is a basic checklist to follow of what the construction mortgage lender is going to want to see as part of your application request.
Your construction loan will get approved a lot faster if all of these items are covered off properly prior to making a formal application for funding.
And regardless of whether you’re project is residential or commercial, its likely that all the following are going to be required in some shape or form when applying for construction mortgage financing.
- Construction Approach. The lender is going to want to know who is going to be doing the building and what their related qualifications are. As an example, will the project be using a turn key builder, a general contractor, or will the borrower be conducting a self build utilizing sub trades where required.
- General Application Information. All lenders are going to want to know who they are dealing with and will require an individual borrower or corporate borrower to complete a construction mortgage application form. This can include the personal net worth statement of the main individuals involved as well as individual and business credit profiles.
- Plans, Drawings, and Permits. Completed and approved drawings and plans will be required to clearly represent what is being built, how its going to look upon completion, and that the proposed building project is approved by the appropriate authorities. Construction financing requests can be considered without everything being finalized, but nothing is going to be disbursed or advanced against a construction mortgage until all approvals are in place.
- Construction Budget. While you may be able to get away with a fairly basic budget summary, the more detail you put into the budgeting process, the more credibility you establish with the lender. This also can go along way to avoiding cash flow problems down the road via items that are missed, cost overruns, etc. Be prepared to provide support for the major cost items including signed price quotes from suppliers.
- Building Time Line. This is another area where more detail can benefit you in a number of ways. The main benefit is for the lender to clearly understand what components will be completed at each stage so that accurate draw schedules can be set up. More detail can greatly assist project management which will help keep the project on track and avoid any delays that inevitably cost money.
Each construction project is going to have its own unique features which may lead to additional lender requirements, but for the most part, any residential or commercial construction loan request will need to include the items listed above.
To learn more about how to increase your chances of getting the construction financing you’re looking for, give me a call and we can go through your project and requirements together.
Click Here To Speak With Joe Walsh, Construction Mortgage Broker.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel