Lucas Munn as the President of Gencorp Homes Inc. is proud to announce the exclusive relationship with Genesis Associates Ltd as the mortgage brokerage of choice, offering financial opportunities to all of GenCorp Homes Inc. past, current and future clients.
Genesis Associates Ltd. is a mortgage brokerage firm based in Mississauga, with the principle broker Rob Munn B.Sc. being licensed since 1985. Currently under the Mortgage Brokerages, Lenders and Administrators Act, 2006, their license registrations are as follows:
Rob Munn B.Sc.: M080002081 Genesis Associates Ltd: 10295 Principal Broker
Genesis Associates Ltd also has a subsidiary business unit specializing in Reverse Mortgages. Genesis Reverse Mortgages is the registered business name for their past, current and future clientele who are interested in learning about the benefits of a Reverse Mortgage, and the lending products available from the institutions. Compare FIRST before you choose.
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Construction Mortgage Loans:
Are you looking to build your dream home? Not everyone wants to buy an existing house. Some people prefer to have a brand new house constructed instead. If you’re wondering if there are mortgage remedies available for building of a new house, the answer is Yes!
The purpose of a construction mortgage is for home builders who are purchasing or have purchased land, the immediate availability of construction financing for building their principle residence, a cottage or a secondary leisure home for their personal use.
Custom home builders will also need a construction mortgage for their clients, when the client already owns their own land and need financing to cover the immediate, upfront construction costs before the first advance is dispersed by the lender.
What is a Construction Mortgage?
A construction mortgage allows you to draw down from the full amount of the mortgage value, at predetermined stages of the home construction. Construction mortgages are given on a what is called a “progress advance basis”. The full amount that you need to borrow, in order to complete your construction, is given to you in stages – otherwise known as “draws” – as you complete various levels of completion.
If you already own the land you want to build on, a first advance is available as an “equity take-out“. If you have not yet bought the land, a first advance is available to assist you with the purchase of a vacant lot.
Different Types of New Construction Mortgages
There are three different ways you can finance your newly constructed home in Ontario.
Builder/Contractor: You have hired a registered contractor to build your custom home with your own money.
Self-Built Home: You have your home built and act as your own contractor.
Buying a Newly Constructed Home: The contractor builds the home with their own money and you need to pay the builder/owner when you take possession of the property.
Construction Mortgage Financing Options
In each of the above three types of new construction there are various kinds of financing options. There are variations in each one related to timelines and conversion. If you’re looking for construction financing in Ontario, you can build your home with a Process-Draw mortgage, Completion mortgage, or combination of the two.
Advance Stages or Draw Schedule
Below is a common (but not the only) draw schedule used by lenders:
1st Draw: 15% complete Excavation and foundation
2nd Draw: 40% complete Roof is on, building is framed and weather protected (airtight, secure access)
3rd Draw: 65% complete Plumbing and wiring is started, plaster/drywall is complete, furnace installed, exterior wall cladding complete
4th Draw: 85% complete Kitchen cupboards installed, bathroom completed, doors have been hung etc
5th Draw: 100% complete Ready for occupancy with seasonal and exterior work completed
Important Things To Note
Prior to each draw being advanced, an inspector will go to the property to ensure the builder is following the NHW (New Home Warranty) policies and to ensure each stage is completed with accuracy before releasing funds. The cost of the inspections falls on the borrower. Some banks deduct appraisal and progress inspection fees from each draw. Each advance/draw as illustrated above will be subject to a 10% construction lien holdback (refer to the last item of this page for a complete explanation, effective July 1 2018). After your mortgage is approved and signed, you will NOT be able to change your mortgage amount to accommodate any upgrades or changes made to the home
Completion Mortgage
A Completion mortgage is needed if you have built or purchased your home through a residential home builder and only really need the funds when the house is finished and you’re ready to move in. Unlike a Process-Draw mortgage, with a Completion construction loan, you typically only need a small down payment to start and only need full payment when the home passes the final inspection.
Steps to Securing a Construction Mortgage
- We meet with you to assess your construction financing needs.
- Based on these needs, we put together a solution that includes details of the loan, payment structure and all expenditures relevant to obtaining the loan are discussed at this stage.
- You submit the required documents to Genesis Associates Ltd.
- We will reconfirm the terms of the loan with you. Note that terms are subject to change if a discrepancy is found in the submitted documents. Genesis Associates Ltd will require an appraisal report upfront.
- A Commitment letter will be provided confirming all the previously discussed terms is issued.
- You sign the commitment after reviewing the document with your lawyer. Remember, your lawyer represents YOU!!
- Appraisal is completed. This is paid by the borrower and if the value determined is lower than anticipated, the loan amount may decrease.
- You are required to obtain ILA (Independent Legal Advice) with your lawyer and based on the lender’s requirements. Final mortgage documents are signed after the ILA.
- The signed mortgage documents are then sent to the solicitor acting on behalf of the lender. Upon satisfactory review of the documents the first draw based on a pre-determined amount and closing date, will be funded after the mortgage has been registered on the property as the security for the lender.
Reference: www.attorneygeneral.jus.gov.on.ca/english/construction_law_in_ontario.php
