What is a Construction Mortgage?
Sandhu Capital offers construction mortgage financing through banks, credit unions, and private lenders, providing competitive rates and flexible solutions tailored to your project’s unique needs.
Obtaining the right construction mortgage can be complex, but engaging with our team early in the planning process ensures a strategic, well-structured approach. We focus on maximizing leverage, securing favourable terms, and providing repayment flexibility, helping set your project up for long-term success.
Our Expertise
Sandhu Capital has experience arranging construction financing for a wide range of developments, including:
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Single-family homes
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Large-scale townhouse communities
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Multi-unit apartment buildings
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Land developments and high-rise projects
From initial planning to final funding, our team will guide you every step of the way, ensuring you fully understand the construction lending process and are well-prepared to navigate it.
Understanding a Construction Mortgage
Construction mortgages are typically structured as Progress Draw Loans, where funds are released in stages based on the project’s completion milestones. Here’s how they work:
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Interest-Only Payments During Construction: You only pay interest during the build phase, helping reduce costs and improve cash flow.
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Multiple Draws: Most projects involve 3–5 draws for smaller builds and more for larger developments. Each draw is approved based on an appraiser or quantity surveyor’s report verifying the stage completion.
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Conversion to Term Mortgage: Once construction is complete, the loan is either paid out using sale proceeds or converted to a long-term mortgage.
Because construction loans carry higher risk, lenders often charge higher interest rates and require a more significant down payment or equity contribution.
Keys to Qualifying
To secure a construction mortgage, Sandhu Capital will help you prepare a comprehensive application package that typically includes:
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Full financial information of the developer or borrower
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A detailed construction budget and site plans
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A signed building contract, including:
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Total construction and land costs
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Timelines from start to completion
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Proper planning and documentation are essential, as delays in funding can disrupt contractor payments, supply procurement, and the overall project schedule.
Construction Mortgage FAQ
What is a Construction Mortgage?
A Construction Mortgage is a mortgage pertaining to the construction of a building on a piece of land. This could be a single family construction, multi-family construction or commercial construction. We offer construction mortgages throughout B.C.
How can I apply for a Construction Mortgage?
You can apply for a Residential Mortgage by heading over to the contact page on our website. Fill out the information and we will contact you the same day!
What is the process of a Construction Mortgage?
Once we are in contact we will ask you for information regarding your mortgage and educate you on the process. After we will collect all necessary documentation and review. We will figure out what mortgage solution will best fit your profile and recommend options. Once the option is selected, we will move forward with processing the application with the lender. Once the lender approves, you can get funded the same week!
What is the max Construction Mortgage loan amount?
We can arrange financing from $500,000 – $50,000,000. (Five Hundred Thousand Dollars to Fifty Million Dollars)
Which locations do you service Construction Mortgages?
We can provide Construction Mortgage financing in Surrey, Vancouver and all surrounding Urban cities within BC. We accommodate our clients to the best of our ability.
Why Sandhu Capital?
Sandhu Capital is a leading private and commercial mortgage brokerage, known for delivering creative financing solutions tailored to all types of borrowers. While we specialize in private lending, our expertise spans residential, commercial, construction, and land financing. Our competitive mortgage packages, extensive lender network, and innovative approach to structuring deals set us apart in the industry.
