Construction & Commercial Mortgage Loans In Vancouver BC
Getting a construction and commercial mortgage loan through a bank is usually more difficult than your typical home purchase or refinance. As these types of mortgages involve a lot of moving parts, having a commercial mortgage broker by your side will make the entire process easier.
At Your Equity, we’ll act as your commercial mortgage broker. We work with lenders in Vancouver who offer more creative options for commercial real estate loans, usually using an equity-based model.
Commercial Mortgages Can Be Used As:
- 1st and 2nd mortgage loan options
- Apartment buildings
- Office buildings
- Shopping centers
- Marijuana grow-ops
- Mixed uses
- Fully-tenanted industrial sites
- Condo inventory
- Lot inventory
Condo Construction Loans & Draw Mortgages
- First draw – Land only. Typically, 50% – 65% financing of the land value
- 2nd draw – Lockup stage, about 35% – 40% complete. Framing, doors and windows complete. Sometimes, money lenders will allow a draw before this stage at around 15% completion once the foundation work has been completed.
- 3rd draw – 65% completion. Roughly complete plumbing and electrical.
- 4th draw – 85% completion. Complete plumbing, electrical and drywall.
- Final draw – 100%
Condo construction real estate loans will also vary depending on you having a Qualified Home Builder or acting as your own general contractor where you sign contracts with sub-trades.
Requirements Of a Commercial Real Estate Loan Application:
- A signed and accepted copy of the building contract
- One complete set of house plans and working drawings (blueprints)
- Site Plan showing legal description and detailed property dimensions
- Confirmation of a “New Home Warranty” builder
- An Appraisal indicating final value once the home is constructed
- Self-builder – When the homeowner acts as the main contractor. Hires, schedules, and manages sub trades
- Copy of Land Contract if the land is being purchased. Or a copy of the Title if the land is already owned
- Resume confirming good knowledge of the home building process
- Copy of all sub-contracts confirming home construction costs
Commercial Mortgage Private Lenders – Draw Mortgage Lenders
As experienced private commercial brokers in Vancouver, we’ve seen private commercial mortgages work best for builders by eliminating excessive red tape through the use of private lenders’ funding.
On average, a private commercial mortgage loan approval is faster and provides a more flexible draw management process.
However, you can expect to pay more for construction financing through a private lender. This is due to greater draw flexibility, higher funding amounts, and the ability of private construction financiers to offer 2nd mortgages for construction and commercial loans.
Banks rarely go in second position when advancing construction financing. On the contrary, they feel more comfortable advancing on 1st mortgages.
Looking to get approved for a commercial mortgage in Vancouver, BC? Achieve your goal in no time by working with the best local broker! Call us today and get your commercial loan application approved.