What to Look For in a New Home
With your financing secured you can start to look for new home developments or plan your rebuild.
Here are some helpful tips to keep in mind as you begin:
Building a new house or renovating an existing one is a significant undertaking that helps build personal equity and adds value to your home. If you’re building a new home or renovating your property, we can provide flexible construction financing options.
Most banks don’t fully understand the business of construction financing, as they want to avoid risky and complicated loans. Our team has the experience to provide timely construction financing based on your schedule. Renovating or building a home is stressful enough, the last thing you need is a problem with financing.
Construction Mortgage Facts:
A loan from a construction lender typically only requires interest to be paid during the construction period. Once the construction is over, the loan amount is due and it becomes a regular mortgage. The money’s advanced incrementally during construction, as it progresses.
Financing to build a new home typically comes in the form of a construction-to-permanent loan. This financing option has two parts: a loan to cover the costs of construction; and a mortgage on the finished home. The advantage of such plans is that you have to apply only once and you’ll have only one loan to close.
A construction loan, unlike a regular mortgage, isn’t meant to exist for a long period of time. If you take out a $200,000 construction loan for six months and you pay an extra 0.5% on the loan, it will cost an additional $250 (assumes an average $100,000 loan balance over a six-month construction period).
It’s important to note that, if you’re willing to pay a higher rate on a construction loan, if you’re doing construction-to-permanent financing, you can obtain more favourable mortgage terms or a longer and better rate from the lender.
GLM Mortgage Group wants to be your construction mortgage broker and can help you financially navigate your way through building a house, from your dream to reality.