Financing a home you are building yourself is a different process from buying a finished one. One family building a home and cottage told us funding for private builds was difficult to find. This is their story, and what to know if you are planning a build.
CLIENT STORY AT A GLANCE
| Client | Family building their own home and cottage |
| Situation | Needed funding for a private build, with other options exhausted |
| What we did | Found lender options, organized the file around lender requirements and stayed in touch through approvals |
| In their words | “found options when we have exhausted them all” |
The situation
The family was building their own home and cottage. Funding a private build can be harder than financing a purchase, because the lender is lending against something that does not fully exist yet.
“when looking for funding for private builds serve to be difficult, Sean and his team found options when we have exhausted them all and made sure funding would be secured to see our project through.”
— Ottawa-area family, 5-star Google review
What we did
We found lender options, helped organize the family around what each lender required, and kept them informed step by step, especially during the approval stages.
“His team stayed in touch through the entire process, especially during the approval stages, keeping us informed of each step, organizing us with lenders requirements and most of all stayed positive when morale was down.”
— Ottawa-area family, 5-star Google review
How construction financing works
- Money is released in stages. Construction mortgages typically use progress draws: funds are released as each phase of the build is completed, rather than all at once.
- Lenders want a plan. Expect to provide build plans, a detailed budget, permits and information about the builder or your own building experience. Being organized speeds up approvals.
- You may need your own funds up front. Draws often follow completed work, so it helps to understand how the first stages will be paid for.
- Options vary a lot. Some lenders do not fund private builds at all. Others do with specific conditions. That is where looking across many lenders matters, including private lenders when needed.
Start with our construction financing page. Renovating or buying and improving instead? See purchase plus improvements, and bridge financing if timelines overlap.
Common Questions
How does a construction mortgage work?
Funds are typically released in stages, called progress draws, as each phase of the build is completed and inspected. Until then, you generally pay interest only on the amount drawn. Specific terms vary by lender.
What do lenders need for a construction mortgage?
Commonly the build plans, a detailed budget, permits, the builder's details or your own building experience, and your usual income and credit documents. Your agent will confirm the list for the lender that fits.
Can I get financing for a private build?
Sometimes. Fewer lenders fund owner-built or private projects, so options depend on your file and the project. Working with an agent who can look across many lenders widens the field.
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About this story: This story is based on a verified 5-star Google review from a TopRankin client. Names and identifying details are left out to protect client privacy. Every mortgage is different, so your rate, approval and timeline will depend on your own file.