Building a new home is an exciting life event! But, it can certainly come with its fair share of complications. Usually, you’ll either be hiring a contractor, buying a new home from a builder, or you plan on building a home yourself. Within these categories there are two types of applicable mortgages, completion or progress draw, which are available to you to finance the project. A completion mortgage implies you don’t need any of the borrowed funds until the home construction is completed, which can require a small deposit. A progress draw mortgage functions by allowing percentages of the borrowed funds to be released at intervals during the construction process. In the event of progress draw mortgage, a land draw could also be required if you’re purchasing the land and inspections will be required at the pre-set intervals of construction.
For more information about which mortgages will go best with your new build, give me a call.