Waiting for a client to secure funding for a project can be a challenge. Whether your client has hired you for extensive renovations (planned or unplanned) or want a new home built from scratch, you’ll need them to find the right lender before the project can begin. At Source Mortgage, we offer both draw mortgages and completion mortgages to homeowners and buyers who are either moving towards a large renovation or wish to build a home.
A Self-Build Home is a new construction project where the person who will be living in the home acts as their own contractor. This is an extremely rewarding experience for many Albertans, as it allows them to stay in control of every detail as their home is built. They can build the entire home themself, hire subcontractors, or do a little bit of both. The draw mortgages available for self-builds release the money in instalments. Typically, they’ll begin with access to 35% of the total loan value, then 65%, and then finally the full amount. This allows them to carefully stay on budget as they purchase land and begin construction. Only after the work is complete and everything has passed inspection will they get access to the full amount.
Buying from a Builder is slightly less complicated. Instead of the mortgage being paid out in increments, they’ll only receive the funds once the home is 100% complete, so they can pay for the home and move in. An interesting quirk of a completion mortgage is that the downpayment is actually paid in increments. If the house is purchased for $300,000, instead of paying the $20,000 down payment up front, they’ll pay four $5000 payments over a few months.
The experts at Source Mortgage are here to help Albertans secure the funds they need to create their dream home. Whether that means starting by finding the right plot of land or renovating a house you already own, we’ve got the right mortgage for you!