BUILDING YOUR HOME
For many people in Toronto, building a customized home that meets their precise requirements, is a more desirable option rather than buying an older home that needs upgrading.
While this is a great idea, there is a difference between qualifying for financing the building of a new home and qualifying for a mortgage to purchase a standing one.
You can acquire financing when building the home in phases and several financial advances over time.
What to take into consideration:
Builder/contractor of the property
When building your new home, it’s important to register with the province’s New Home Warranty programs. The builder/contractor you choose to build your dream home should not only be able to complete the project, but also provide peace of mind that their work is of the highest quality possible. Remember, it is your home and castle, but it is also probably your biggest investment, and like any investment, you want it to grow with time.
Cost of construction.
The total construction cost must include building costs, the land, and non-building costs such as required permits, interest, etc. Take into consideration the unexpected costs or changes you may need. We suggest saving an additional 15% of the estimated cost to cover any unexpected expenses that can and do arise, for unforeseen issues like high cost of fuel, or supply chain issues.
Duration of construction.
The maximum term on construction is one year from the date of the first advance.
Available equity upon down payment.
You must present the down payment at the time of application from whatever sources are available to you. The minimum down payment depends on the lowest assessed value or construction cost; besides the amount you desire to borrow.
Availability of funds.
The first part of construction financing is called the draw through a lawyer. Once a draw is requested, an appraiser will inspect and confirm all the completed work at that stage.
PROCEDURE OF BUYING HOME
REQUIRED DOCUMENTS FOR YOUR MORTGAGE
Current employment status and income amount as: