A Construction Mortgage is a type of loan specifically designed to finance the construction of a new home or other types of property. Unlike a traditional mortgage, where the full loan amount is typically disbursed upfront, a construction mortgage is released in stages, known as progress draws, as construction milestones are completed.
Common scenarios for construction mortgages could include: Building a new home on a vacant lot (including tearing down an existing home to build a new one). You may have to meet stricter requirements to get approved. This goes beyond the typical minimum credit score and reliable income that is required for a traditional mortgage.
Lenders may have stricter requirements for construction mortgages, including detailed plans for the construction project, a qualified contractor, and a higher down payment compared to a standard mortgage.
At Sunlite Mortgage, we have helped Canadians navigate the unique challenges of building a home from the ground up. We will show you how construction financing works, explain your draw schedule, and structure a plan that keeps cash flowing without unnecessary stress.
