Image Name
real-estate-agents-agree-buy-home-give-keys-clients-their-agency-s-offices-concept-agreement 1 (1)

Want to build a new home or renovate? Construction & Land Financing

HomeConstruction & Land Financing
How much are you looking to borrow?
building-a-house-2

Construction and Land Financing

  •  Image Name
    Home Improvement
  •  Image Name
    Build Brand New Home or Cottage
  •  Image Name
    Finish Your Basement
  •  Image Name
    Finance Development
  •  Image Name
    Build An Addition
  •  Image Name
    Finance Subdivision
  •  Image Name
    Build a Laneway House
  •  Image Name
    Pre-Construction Financing
  •  Image Name
    Improve Your Credit Score
  •  Image Name
    Buy and Develop Land
  •  Image Name
    Residential Construction
  •  Image Name
    Commercial Mortgages

Financing Land

294326449_455905769875114_1171495369482185973_n
Hard Costs

The loan will cover any costs that are directly related to the building work being done so this means labour as well as the raw materials. Without either of these two factors, the construction cannot start so these are both essential to your project.

Soft Costs

These are the costs that are indirectly related to the project which means that they arise as a result of something else. For example, this could include engineering fees, permit fees, and architectural fees. If the cost doesn’t directly relate to the contract but it does enhance the project somewhat, it falls into this category.

Contingency Reserve

Generally, you will find that an extra 10% will be added on top of the construction costs as a contingency account. At times, orders will need to be changed or upgrades are required so this contingency amount is highly recommended. If you find that it doesn’t get used by the end of the project, at least you had it there for security and peace of mind.

Allowances

After the actual construction, you will probably need items in the home or extra room such as flooring and other products to make it ‘livable’.

Total Costs

Taking all of the previous categories we have discussed in mind, you will come up with a total cost for the entire project. When the company is deciding how much you can borrow, they will take the lesser of the total costs or the appraised value.

Lot Equity

Lot equity may also be found and this is the difference in value between the loan to be paid off for the land and the appraised land value itself. Any difference will be credited towards the down payment.

Frame-115-1
Stay current with the latest topics and mortgage news.
Subscribe to our newsletter. We are about quality over quantity and we don't like spam. You can unsubscribe at any time.

     Image Name