Construction loans in the form of a mortgage against the property where the building is taking place can be secured by builders, buyers, and property owners for construction ranging from new construction on residential, commercial, and industrial structures as well as additions.

Residential properties can include categories like vacation and cottage and multi-unit under 5.

Financing programs are provided by banks, credit unions, trust companies and other institutional lenders as well as private lending sources.

Because of inherent complexity in the project management associated with this type of mortgage financing compared to others, a borrower would be well advised to work with a construction mortgage specialist that has worked on similar products in the region where you are contemplating building.

Construction financing is the initial phase of financing associated with any type of building project. The second phase is a longer term take out of the construction funding portion once the construction phase has been completed.

The reason for the split in financing facilities is due to the related risk of construction versus that of a completed long term asset. Construction projects have more risk and as a result command a higher costs of borrowing. The more financial leverage that is required, the more likely the financing will be done by a private lender that specializes in construction.

The only way to get access to all available options is to work through a mortgage broker that focuses on construction project financing.