“Toronto Home Building Loans For Self Builds and Professional Builders”
A Toronto home building loan can be secured for a wide variety of construction applications, the most common being a single family dwelling.
With single family homes, building loans are typically either for a self build project or for construction where the builder or developer is the borrower.
In a self build situation, the property owner has the intent to construct a dwelling and live in it after completion. The property owner can be the direct builder themselves but in most cases serve as the general contractor or director of their own project, hiring out the actual work to building professionals.
With a builder loan, the builder is the actual property owner and requires construction financing to complete a project for the purposes of resale. The house to be construction may be presold or to be built for future resale.
The main difference between the two for construction mortgage financing purposes is that self builds typically don’t require enrollment in a home insurance program where professional builders building for resale do.
A Toronto home building loan is available through both bank and private mortgage lending sources. Bank sources are always more focused on credit profile and repayment ability while private mortgage lenders are more interested in the post construction value of the property and the exit strategy to repay the construction loan.
Toronto home building loans from banks will typically require that both the construction loan and post construction take out or long term permanent mortgage are both in place prior to the commencement of construction. Basically, if you can’t qualify for both the construction loan and the long term mortgage at the same time, you will not be getting a home building loan from a bank as the only reason they provide construction financing in the first place is to access the preferred longer term mortgage security. Because many people cannot meet the banking criteria or don’t want to be constricted to the bank’s long term mortgage options, private mortgages are a very popular form of home building loan.
If you require a Toronto home building loan either as a property owner or a professional home builder, I suggest that you give me a call so I can quickly assess your requirements and provide you with relevant construction financing options for your consideration.
Click Here To Speak With Toronto Mortgage Broker Joe Walsh.
