Whether you’re planning to build your dream home, a cabin by the lake or a major renovation to your existing home, a Construction Mortgage can help make it a reality. As the name suggests, it’s not only for new builds, but also for major construction projects (over $40,000) on existing homes. With any type of build or renovation, funds will only be advanced once the work is completed, pending an appraisal and examination of the property.
Northern offers two types of Construction Mortgages through Sagen™ or CMHC: Contractor-Built and Self-Built. Both allow for access to funds at predefined stages, as the home is built and completed. Once construction is completed, your outstanding loan is converted into a fixed mortgage with the option of either a 3-, 4- or 5-year term.
This is usually the preferable option because it involves a professional contractor managing the build. Any time the general contractor of the project is not the owner, Ontario law mandates that the new build be protected by the Tarion (www.tarion.com) new home warranty.
This is more challenging option because you must prove that you’re experienced enough to be the General Contractor, managing the project from beginning to end, including hiring sub-contractors and submitting all project invoices to Northern.
A Northern expert can help you navigate the complicated process.
Remember to include the costs of living somewhere else while your home in being built.
We highly recommend that you purchase Life & Disability Insurance.
Eligibility requirements differ depending on the nature of your construction project, but you’ll likely need to provide the following when you apply:
The first step should be to talk with a Northern Mortgage Specialist. Just book an appointment with a Northern Mortgage Expert online.