Building a custom home is an exciting journey, but it requires the right financial plan to bring your vision to life. With a Construction Build Mortgage, you can secure financing that’s specifically designed for the unique process of building a home from the ground up. Unlike traditional mortgages, construction mortgages are structured to provide funds at key stages of the build, ensuring you have access to capital when you need it most.
I specialize in helping homeowners and builders navigate the complexities of construction financing. From securing your loan to managing disbursements during construction, I provide personalized support every step of the way. Whether you’re building a single-family home or managing a larger project, I’ll work with you to create a financing plan that fits your budget and timeline.
How Does a Construction Mortgage Work?
A Construction Mortgage works differently than a typical mortgage for an already-built home. Instead of receiving the full loan amount upfront, the mortgage is disbursed in stages—or “draws”—as the construction progresses. This ensures you have the necessary funds for each phase of the build, from laying the foundation to completing the final touches.
Here’s a step-by-step breakdown of the construction mortgage process:
- Initial Consultation and Pre-Approval:
We’ll start with a consultation to discuss your financial situation and project goals. I’ll help you get pre-approved for your construction mortgage, so you know your budget before the build begins. - Progress Draws:
Once your loan is approved, funds are released in stages as your construction reaches certain milestones. These draws usually coincide with key phases like foundation completion, lock-up stage, and final completion. - Final Mortgage:
After the construction is finished, your mortgage will convert into a regular home loan. I’ll guide you through this transition to ensure everything is set for long-term financing.
Who Can Benefit from a Construction Mortgage?
A Construction Build Mortgage is ideal for:
- Custom Home Builders: If you’re working with a builder to create your dream home from scratch, a construction mortgage provides the financial structure needed to manage costs throughout the project.
- Owner-Builders: For those acting as their own contractor or heavily involved in the build, this type of mortgage gives you flexibility to control the financing as your project develops.
- Renovators: If you’re undertaking a major renovation or expansion project, a construction mortgage may also apply, providing incremental funding as the work progresses.
Key Benefits Section
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"Most knowledgeable about mortgages"
Deb is the most knowledgeable person I have talked to about mortgages weather it is a first time home buyer or someone looking to refinance she finds the best product to fill each individual needs
Bob K.
Navigating the Construction Mortgage Process with Deb Murdoch
Securing a construction mortgage requires an expert who understands the ins and outs of custom home financing. I’m here to help you navigate the process, from getting pre-approved to managing the logistics of progress draws. With access to over 20 lenders, I can find you the best rates and terms to match your project goals.
Here’s what you can expect when you work with me:
Step-by-Step Guidance
I’ll walk you through the entire process, ensuring that you understand each phase of your construction mortgage and that all paperwork is completed efficiently.
Competitive Rates and Flexible Terms
As a mortgage broker with access to multiple lenders, I’ll shop around to secure the most competitive rates and flexible terms for your construction mortgage, ensuring your project remains within budget.
Support Through Every Draw
From the initial disbursement to the final loan conversion, I’ll handle all the details, coordinating with your lender and builder to ensure timely progress payments. This helps keep your construction project running smoothly and on schedule.
Frequently Asked Questions
How do I qualify for a construction mortgage?
To qualify for a construction mortgage, lenders typically require proof of income, good credit, and a detailed plan of the construction project, including timelines, costs, and builder contracts. I’ll help you gather the necessary documentation for a successful application.
How are construction mortgage draws structured?
Construction mortgage draws are released in stages, typically following key milestones in the build, such as foundation completion, lock-up stage, and final inspection. The exact schedule may vary based on the lender and the scope of your project.
Can I make changes to my loan during construction?
Yes, construction mortgages can offer some flexibility to adjust loan amounts based on changes in project costs. I’ll work with your lender to ensure any adjustments align with your overall financing plan.
What happens once construction is complete?
Once your home is finished, your construction mortgage will convert into a standard mortgage with regular payments. I’ll guide you through this process to ensure a smooth transition to long-term financing.
What kind of down payment is required?
The completion mortgage for a build is the same as a traditional loan but the construction mortgage portion of the build has a deposit that is quite often reliant on the builder. The builder could request a higher deposit to get the project started but upon completion, provided you qualify, the down payment can be as low as 5% on a home that is below $500,000. Note that on the completion mortgage, if you already own the land, the equity in the property can be used toward the down payment.
