Construction to permanent loan options will vary depending on the type of construction loan you start with.
For instance, if you want to acquire a bank or institutional construction loan or mortgage, the bank will likely have a requirement that you also qualify for the take out or permanent loan at the same time. This is because the only reason that an institutional lender will provide a construction loan for home construction in the first place is to get access to the long term permanent mortgage that will be required at the end of the construction period.
So with an institutional construction loan, the permanent loan to take out the construction financing at the end of the project will be predefined and determined at the commencement of construction.
With private mortgage construction loan, the private lender may or may not require that the take out mortgage be arranged before the start of construction. In most cases, this is not a requirement.
As a result, you have considerably more time to shop around in the market for the best potential deal before the end of the construction period when the take out or permanent loan will be required.
The private mortgage route allows you to align yourself with any long term permanent loan program you desire with no restrictions as to the lenders you can consider.
With the institutional construction loan, you will be limited in choice and selection to the permanent loan pay out options that particular bank has available including the rates and terms that they offer.
At the end of the construction project, the costs registered against the property are paid out by the new permanent loan. This can involve several mortgages, especially if a mortgage was in place before the construction loan was acquired.
The payout of the property mortgages will take place once the construction project is certified as complete by the building inspector and the lien hold period has passed.
The best way to arrange financing for the construction to permanent loan process is to work with an experienced construction mortgage broker who can guide you through the different programs that will best suit your requirements and financing criteria.
If you advise on construction to permanent loan financing, I suggest that you give me a call so I can quickly assess your situation and provide relevant permanent loan financing options for your consideration.
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