FAQs

I am looking at buying a new construction home... what type of products do you offer?

We offer "rate caps" from 4 months up to 12 months, depending on the location of your purchase.
You can select from any of our products from CIBC mortgages, choosing between open and variable products to terms up to 10 year.
Rates vary between 1.01% below Bank Prime up to 1.2% off closed terms.

How can I stay in my current house while I am building my new one?

Self-build/progress mortgages can fund construction of your new home while you remain in your current house. This will have to be approved by the lender. This approach if approved by the lender, can be a more economical strategy of structuring your finances rather than selling your current home and moving to rental accommodations. Provided you qualify, the lender will require confirmation of the sale of your current home (a written unconditional sale agreement) upon reaching a predetermined point of completion of the new home.

For peace of mind and in order to ensure you have more cash to work with, many applicants opt to sell prior to starting construction on the new home reside in short-term rental accommodations or with other family members

Can the rate cap be extended?

No, the rate cap is set for the period chosen and if it expires, current rates will take affect. Please note that the look back on these mortgages where the rate cap has expired is 30days only.

If the rate drops during the Rate period, can I get the lower rate?

The rate cap gives the lower of the rate cap or the lowest rate within 30days prior to funding. If this falls lower than the capped rate, you will get the lower rate otherwise you will receive the capped rate.

If my progress draw mortgage has been approved as an insured mortgage, and come into some mony and can now afford an uninsured (conventional) mortgage, what happens to CMHC/GEMI?

As the mortgage was approved as an insured mortgage you will still have to pay the original mortgage premium to the insurer as they did all the analysis on this property and therefore must be compensated regardless whether this mortgage is cancelled or amended to conventional..

Is the land draw deducted from the 1st Draw?

Yes, when a land draw is approved on a conventional mortgage you are not getting more money they are just getting a portion of the 1st draw sooner (remember lands draws can be approved on conventional mortgages only).

Can I have a land draw if I already own the land?

Land Draws are subject to approval for conventional mortgages when the Land is being purchased, has been purchased and is free and clear, or there is an outstanding loan secured by the land. 

If property is 95-99% complete, will the lender treat as 100% complete? What is the minimum percentage Lenders will fund final advance on?

Lenders will only fund if the house is 100% complete (less 3% allowance for seasonal holdbacks) What we mean is that the house can be complete to 97% and the only thing that is not complete is something like siding or pouring the driveway. If this is the case we will only fund 97% to the solicitor holding back the 3% until a final inspection advises the house is 100% complete.

After the first draw can the I change the terms and conditions of the mortgage?

Yes you can change you final mortgage terms after the first draw. You do not sign the final mortgage documents until the house is complete and therefore can make changes until that time.

Can I Port my existing mortgage to a New Construction Mortgage to eliminate or reduce penalties?

For completion mortgages you have only 120 days to return to with a new mortgage to maintain the portability features. The new mortgage must be fully funded within the 120 days.

For progress draw mortgages, you have up to 180 days in order to maintain the portability features. The first advance of the progress draw must be within the 180 days.  Most lenders will not process any applicable penalty refund until the new mortgage is fully advanced.

How long do I have to build?

There is not set amount of time imposed. However, keep in mind that funds will not be advanced if there is no progress in construction. Keeping to the construction timeline is far more economical to your bottom line.

On a self-build mortgage do I pay interest on the whole amount I want to borrow or just what I have borrowed so far?

You only pay interest on the amount you have actually borrowed. As your project progresses and you borrow more, your monthly interest payments will increase.

How does the Construction Lien Act affect my construction project and how is it handled during construction?

Any person or company that supplies your project with materials or labour has the right to place a lien against the title of your home as a method of recovery in the event of non-payment. The Construction Lien Act requires that an amount be held in trust from which a lien may be paid. The lender will instruct the solicitor to hold back an amount (usually 10% of each draw payment) until 45 days after substantial completion of the home.

 

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