Now Offering
In-Person &
Virtual Meetings

Book Now Book Now

From Blueprint to Reality: What You Need to Know About Mortgages & Building Your Dream Home

From Blueprint to Reality: What You Need to Know About Mortgages & Building Your Dream Home

building your dream home

building your dream home

When searching for a new home, you’ll find one that suits your space and location needs, but does it truly fulfill your dreams? Probably not. That’s where the allure of building a custom home comes in. With a custom home, you have the freedom to design a space that reflects your unique style without having to compromise on any details.

Now, you might wonder if the timing is right for you to embark on this dream project. Perhaps you’ve inherited or received some land, or you’re ready to resize your living situation and have the time and money to invest. Building a home from the ground up can be a daunting task. To help ensure you’re ready to secure the mortgage you need for this project while laying the groundwork at the same time; Let’s explore what’s involved so that you can make informed decisions along the way.

Make a plan to build your dream home that includes a budget

Like any home-buying purchase, you need to start with a budget. And, to establish a budget you need to know the costs involved.

A few you will need to estimate are the costs of:

  1. Buying the land
  2. Preparing the land
  3. Obtaining building permits
  4. Exploring bylaws and vendors
  5. Architecture and planning costs
  6. Construction costs
  7. Finishing costs

On average the cost to build a house in Canada is about $185 per square foot for a detached home, however, this varies depending on the area you choose to build in and the materials you choose to use as well. When calculating your costs, check for average prices in your desired location so that you know what you are in for ahead of interviewing contractors.

Next, you’ll want to shop around when it comes to your mortgage.

You might have asked the question, “Is a mortgage different when you’re building your home?”

Yes and no. There are two main types of mortgages for custom homes: construction/draw mortgage, where funds are released in stages during the construction process, and completion mortgage, which is paid in bulk after the home is finished. Similar to a regular mortgage, you will need to get preapproved so be sure to use my mortgage calculator, to see what you can afford to build before you start drafting up the plans.

Important things to consider before applying for a new construction mortgage

When financing your custom home construction, there is more to it than an application and approval. You need to be thinking about these areas as well:

  • Qualification requirements: Just like any mortgage application, you’ll need to meet specific qualifications, such as providing proof of income, assets, and credit history. Additionally, having professional blueprints and approved building permits is essential.
  • Financing the lot: You can obtain a construction mortgage even if you haven’t purchased the lot yet. The cost of the lot can be rolled into the total mortgage loan after the home is built, but owning the lot beforehand may lead to lower interest payments.
  • Plan for setbacks: Prepare for possible delays, setbacks, and cost overruns that are common in new home construction. Because of this, it is important to have a financial backup plan to sustain yourself during the entire construction period. Keeping in mind that some building periods could extend beyond a year or two depending on circumstances. And, if there is a delay on your move-in date, you’ll need to have another place to stay until the home is ready.

The most important tip: Work with professionals! From appraisers and contractors to mortgage brokers and real estate agents…

Embarking on the journey of building your dream home is a significant decision. It involves a collaborative effort, starting with envisioning your ideal home design and working closely with contractors, architects, and financial advisors to bring that vision to life.

As a professional mortgage broker and financial advisor, I am here to assist you in finding the most suitable building loan while securing the best rates for your traditional or nontraditional mortgage. Guiding my clients through this process is a source of pride, and I’m excited to help you achieve your aspirations and create your oasis. If you’re ready to explore your mortgage options or you have a few questions before getting started on your custom-building project, give me a call at (705) 315-0516 or click here to book a consultation with me. I can’t wait to hear your ideas and help you make this dream a reality.

× Close this modal popup