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Build Your Dream Home with Suganthan 

There are several considerations to make when you undertake what can be a rewarding and exciting project – building your own home. You can self-build, build with a project manager or hire a professional contractor. Whatever path you choose, we have advice that makes your project go smoothly while checking off all the critical to-do’s that will pop up along the way. We also take pride in knowing the details of the construction process itself. Though we focus on construction financing, this article will give you a key list of things to consider when embarking on your project. 

Firstly, doing your own research and building out your vision is very important. What kind of home will you need? Have you considered planning for family in the future? Do you maybe want to have 4 children, 3 years down the road and have you factored this into the number of rooms or spaces you will need? Perhaps you’re a coupled professional who wants luxury regardless of having kids. Your vision is personal to what makes your home beautiful to you.  

Key Considerations Before You Build: 

  • Building a home will take time and has many moving parts. Construction financing is one component of the entire process.  
  • Seasons will affect timelines and even the most expert builders take time because you want a quality end product. 
  • Your home will need a lot of patience and sometimes, things may not go your way. Have options and alternatives available for your vision when possible. 
  • When you find a good contractor, you will have to use very few alternatives since they focus on making your vision come to life. 
  • During Covid-19 and in special circumstances, there could be a supply shortage. Plan for flexibility in your timeline. 

Key Considerations for Construction Financing:  

Maximum Loan We offer 100% of the construction cost and 75% of the home’s end value. 
Land Acquisition If you purchase land to build your house, the loan amount is reduced to 65% of the purchase value of the house. 
Number of Fund Advances, also known as Draws, through Private Institutions There are no requirements on the number of advances or draws, but it is to your advantage to limit to 6-8 draws. Each fund advance could include an inspection and administration fee and keeping your quantity of draws reasonable will keep your borrowing costs low.  
Number of Fund Advances through Traditional Banks Banks may include up to 4 fund advances or draws by default but will charge you, similar to private institutions, for additional draws 
Payments You can make monthly payments towards your construction loan or payments with interest reserved. Interest reserved means you make your payment from the borrowed loan and pay lump sum interest at each subsequent draw.
Pre-Payment Most construction loans are fully open. You can pay off the amount within the term. If the project goes off the timeline, you will need to renew the construction loan. 

Now that you’ve had some exposure to key considerations before, during, and after construction financing, we want you to know that Suganthan and his team are there for each of these steps and key decisions. Though we’ve outlined key considerations, there are several other factors to consider to make your project come to life. If you have ideas for home construction, whether it is now or in the future, give us a call and let’s chat about your unique plans.  

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Suganthan Thavarajasingam

Mortgage Broker