Building a New Home with a Construction Builder’s Mortgage
If you are purchasing raw land with the intention of building a new home, you may need a construction builder’s mortgage. This type of loan provides financing for both the land purchase and the construction of the new home.
The process of obtaining a construction builder’s mortgage is similar to that of a traditional mortgage. However, the lender will require additional information, such as building plans, construction contracts, and a timeline for completion.
The lender will typically release funds in stages as the construction progresses. This is known as a draw schedule. The builder will submit invoices for completed work, and the lender will release funds to cover the costs.
Conclusions and Further Thoughts
Financing raw land in British Columbia can be challenging, but it is not impossible. Traditional lenders, private lenders, home equity loans, and specialty lenders are all options for financing the purchase of raw land. When purchasing raw land, buyers should be aware of the differences between serviced and unserviced land.
If you are building a new home on raw land, a construction builder’s mortgage may be necessary. The lender will release funds in stages as the construction progresses, and the builder will submit invoices for completed work.
As always, it is essential to work with a knowledgeable and experienced mortgage broker like Huber Mortgage to ensure that you are getting the best possible financing for your raw land purchase.
Huber Mortgage has successfully funded files for raw land as well as construction mortgages. Call us to find out how you can qualify!
PS – One of my hobbies is blogging about mortgages, debt and government policy. During the day I’m a MORTGAGE BROKER in Kelowna, BC!
Check out the Huber Mortgage Home Buyers Guide HERE