Mortgage Blog

Understanding the Construction Mortgage Canada Process

Building your dream custom home in Burlington, ON, is an exciting milestone. However, financing a new build requires a specialized approach compared to buying an existing property. This is where a Construction-to-Permanent Mortgage, commonly referred to as a Construction Mortgage, becomes essential.

As you explore your options for a construction mortgage canada, it is crucial to partner with an experienced mortgage broker who understands the local market. At TLC Mortgage Group, led by Jason Woods, we are experts at providing second opinions on construction-to-permanent mortgages to ensure you get the best terms possible.

• Convert your construction loan into a standard mortgage seamlessly.
• Secure funding at various stages of your build.
• Avoid the stress of re-qualifying once the home is finished.

If you are considering a custom build, you might also want to explore an insured construction mortgage for added flexibility and peace of mind.

Progress Draw vs. One-Time Close: Which is Right for You?

When securing a construction mortgage in Burlington, you generally have two main financing structures to choose from: the progress draw and the one-time close.

Progress Draw Mortgage

A progress draw mortgage releases funds in intervals as your builder completes specific stages of the home. An appraiser inspects the site before each draw is approved. This option is fantastic for managing cash flow during long builds. If you are transitioning between homes during this time, you may also need bridge financing to cover temporary gaps in funding.

One-Time Close Mortgage

A one-time close construction-to-permanent mortgage combines your construction loan and your permanent mortgage into a single loan. This means you only pay closing costs once and sign one set of documents upfront. Once the house is complete, the loan automatically converts to a traditional mortgage.

Why Choose Jason Woods for Your Construction Financing?

Navigating the complexities of a construction mortgage requires professional guidance. As a trusted Principal Broker in Burlington, ON, Jason Woods has access to over 40 lenders and a proven track record of securing fast, competitive approvals.

We know that construction projects can be unpredictable and stressful. That is why we are experts at providing second opinions on construction-to-permanent mortgages. If you already have a quote from a bank, let us review it. We often find better rates, lower fees, or more favorable draw schedules for our clients.

Whether you are a first-time custom home builder or an experienced investor, our goal is to make the financing process fast, simple, and secure.

Q1: What is a construction-to-permanent mortgage?

It is a specialized financing option that provides funds to build a home and then automatically converts into a traditional permanent mortgage once construction is complete.

Q2: How does a progress draw work in Canada?

A progress draw releases funds in specific intervals, usually across 4 to 5 stages, as the building process reaches key milestones verified by an appraiser.

Q3: Can I get a second opinion on my construction mortgage approval?

Absolutely. We are experts at providing second opinions on construction-to-permanent mortgages to ensure you receive the most competitive terms and rates available.

Q4: Do I have to pay interest on the full loan amount during construction?

Typically, no. With a progress draw mortgage, you only make interest payments on the funds that have actually been advanced to you by the lender.

Q5: Is bridge financing available during a custom home build?

Yes, bridge financing can be arranged to help you manage the financial transition between selling your current home and completing your new custom build.