Construction Loan
Looking to build your dream home? Prefer building a new home rather than buying an existing home?
A construction mortgage allows you to draw the full amount of the mortgage at predetermined stages as you progress through home construction. You receive funds as you complete various levels of completion.
Stages/ Draw Schedule
| Draw Stage | Required Building Completion | Construction Stage | % of Total Mortgage Amount Advanced |
|---|---|---|---|
| 1st Draw (optional) | 15% complete | Excavation and foundation complete | 15% |
| 2nd Draw | 40% complete | Roof is on, the building is weather protected (i.e., airtight, access secured) | 25% |
| 3rd Draw | 65% complete | Plumbing and wiring is started, plaster/ drywall is complete, furnace installed, exterior wall cladding complete, etc. | 25% |
| 4th Draw | 85% complete | Kitchen cupboards installed, bathroom completed, doors have been hung, etc. | 20% |
| 5th Draw | 100% complete | Ready for occupancy with seasonal and exterior work completed | 15% |
Prior to each draw being advanced, an inspector will go to the property to ensure the builder is following the New Home Warranty policies and to ensure each stage is completed. The borrower pays for these inspections. Some banks deduct appraisal and progress inspection fees from each draw.