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Builders Mortgage
The example below will give you an idea what a builders mortgage or construction mortgage looks like. If you are in new home construction and have a question please email me at harvey_mccallum@centum.ca
Construction Progress Draw Mortgage We offer mortgages on new home construction in the form of a construction mortgage or builders mortgage. We also have tools to help with new home construction.
Requirements
- HUDAC approved (registered under the Provincial/National New Home Warranty Program)
- Land financing may be paid from first advance.
Advance Schedule
Advances will be made as construction progresses, always holding back the cost to complete construction and any provincial lien holdback requirements. For uninsured/GE insured, the first advance may be made when the property is 40% complete. For CMHC insured, the first advance may be available earlier. Please contact your BDM for more details.
We offer mortgages on new home construction. We also have tools to help you with a builders mortgage and construction mortgage.
- HUDAC approved (registered under the Provincial/National New Home Warranty Program)
- Land financing may be paid from first advance of the buidlers mortgage.
| Progress Advance Schedule |
|
Draw |
%
complete |
Description of Work Complete |
| 1 |
40-50% |
roof shingled; frame; sheating; doors & windows; rough plumbing & electric; insulated & vapour barrier; basement floor; This is commonly referred to as the "Locked up" or "Air Tight" stage. |
| 2 |
65-70% |
Plaster or drywall completed, furnace installed and working, exterior walls completed. |
| 3 |
85% |
Trim work completed; kitchen cabinets/cupboards installed; bathroom tile and glazing completed; interior doors hung. |
| 4 |
100% |
House completed. |
| Example |
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Loan Amount
$130,000 (G) |
Building Value $160,000 |
Land Value |
| A |
B |
C |
D |
E |
F |
H |
| Draw |
% Complete from Inspection |
Building Cost (excluding land) |
Total Advance To Date (Column H) |
% of Remaining Construction (100% - A) |
Cost to Complete (D x B) |
Lien Holdback (10% x A x B) |
Alailable Loan Amount (G) - (E + C + F) |
| 1st |
43% |
$160,000 |
$0 |
57% |
$91,200 |
$6,880 |
$31,920 |
| 2nd |
70% |
$160,000 |
$31,920 |
30% |
$48,000 |
$11,200 |
$38,880 |
| 3rd |
85% |
$160,000 |
$70,800 |
15% |
$24,000 |
$13,600 |
$21,600 |
| Final |
100% |
$160,000 |
$92,400 |
0% |
$0 |
$16,000 |
$21,600 |
| Total |
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$114,000 |
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*$16,000 |
$114,000 |
* Lien holdback % and filing period varies by province for a builders mortgage or construction mortgage for new home construction. The holdback is released once the provincially required # of days have expired following the inspected completion of the new home contruction project.
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