If you want to finance a Toronto construction project, you may have already done some research and learned that construction financing is much more complicated than conventional mortgage financing. There are a lot of really great deals out there but if you do not dot your “I’s” and cross your “T’s” it can get really expensive.
The best type of professional to guide you through the process is a local mortgage broker who specializes in construction financing. If you are seeking to finance a construction loan in Toronto, seek the assistance of a Toronto Mortgage Broker. This can get tricky because the majority of mortgage brokers specialize in residential mortgage financing. Even a residential mortgage broker, who wants to get into construction loan financing, benefits from a relationship with a mortgage broker who specializes in construction loans.
How do you ensure you are dealing with a mortgage broker who is a construction loan specialist? Ask lots of questions and do a little bit of research. Here are some tips.
1. Visit their website. Is a large portion dedicated to useful information about construction loan financing? Are there client testimonials?
2. Google them. Other customers may have posted reviews about their service and you can see if they are a leader in their field by how many results come up on the search engine under their company name.
3. Call them and ask them about other construction financing projects that they have completed and ask for references.
4. Visit the FSCO website to confirm that they are licensed.
5. What types of properties can they finance? (residential single family, small or large subdivision, commercial, industrial). A mortgage broker who specializes in construction loan financing should know about all areas of construction loan financing.
6. Construction financing is as much an art as it is a science. Advances are made in progress draws in relation to work that has been completed.
If you are planning on applying for a construction loan here is what you are going to need: a site plan, building plans, a building permit (if available), a construction budget with a breakdown of hard and soft costs, a detailed cash flow with dates and advance requirements, construction contracts, builders resume and history of recent projects, a marketing plan and brochures if the final product is to resold in which case you may also require some pre-sales , a copy of typical purchaser agreement with all schedules, projected sale prices or rental rates with comparables and competitor details, presale details and estimated sell up time and completion date, offers to lease (if pre-leasing) or if it is a condominium, a copy of condominium application and/or draft documents.
Once you have found your mortgage broker that specializes in construction loan financing, they can guide you the process and help you obtain the financing that you will need to achieve your dreams. For more information please visit www.firstequity.ca or consider the services of David Mandel, a Toronto Mortgage Broker who has over 20 years of experience specializing in commercial mortgages and construction mortgages. David Mandel can be reached by calling 416-590-9800.
