Tania Grozelle
Regional Mortgage Corporation
Work: 403-343-1125
Cell: 403-392-5808


Construction Draw MortageCONSTRUCTION DRAW MORTGAGES

What is a construction draw mortgage?

A 'Draw Mortgage' or 'Progress Advance' mortgage allows the builder to be paid a portion of the purchase price of the home at certain stages of construction.  These stages are predetermined and specified by the lender.  Alternatively, a 'Completion Mortgage', is one single advance paid to the builder upon possession date. This type of mortgage is most common when purchasing a home that is already completed or nearing completion within 120 days.  Most lenders will not hold a rate for longer than 120 days.

How do I arrange a Draw Mortgage so that I can build my new Mason Martin custom home?

Regional Mortgage Corporation and Mason Martin Homes work together to make it easy for you.

  • Step 1 - Get a pre-approval from Regional Mortgage. That way you will know how much you can spend on your new home. Your Mortgage Advisor will advise you on what documents you will need to gather so that your mortgage approval can be completed quickly and easily.
  • Step 2 - Plan your new home with a Mason Martin Homes New Home Planner. Pay down payment funds as agreed to Mason Martin Homes.
  • Step 3 - Mason Martin Homes will forward your signed purchase agreement to regional Mortgage Corporation.
  • Step 4 - Review and sign mortgage commitment with Regional Mortgage Advisor.
  • Step 5 - Regional Mortgage will forward a mortgage approval letter to Mason Martin Homes so that they can begin construction.
  • Step 5 - Visit with lawyer to sign legal documents.
  • Step 6 - Mason Martin Homes and Regional Mortgage will work with the lender to arrange for draws. You can leave it all to us.


Mason Martin Homes will:

  • Pay for the inspection and appraisals when they are ready for a draw advance.
  • Cover the costs of the interest accrued during construction until you take possession of your new home.
  • Pay for the legal fees if you use their own lawyer.
  • Guarantee your purchase price as agreed in the contract. Any cost over runs that are not created by changes requested by the buyer is the responsibility of Mason Martin Homes.
  • Work directly with Regional Mortgage and the lender during the planning and construction of your new home.


Why wouldn't I just go to my own bank to set up a draw mortgage?

One of our areas of specialization at Regional Mortgage is draw mortgages. We are able to offer draw mortgages from many different lenders. We make it easy so you can just focus on planning your exciting move into your new home.



Why Regional Mortgage?

Our Mortgage Advisors will:

  • Guarantee that you get the most favourable financing terms and rate possible, saving you the hassle of shopping around on your own. You will know all of your options at one single point of contact and one credit check.
  • We will order the inspection once Mason Martin Homes is ready for a progress advance so that you do not have to deal with this chore at all. This is often not the case when dealing directly with a bank on your own and can result in much confusion and frustration. Who needs it?
  • We work closely with Mason Martin Homes to ensure all goes smoothly as possible with your financing.


What is the advantage of a draw mortgage to me?

You are guaranteed the interest rate that is written on your mortgage commitment as long as the first draw happens before the rate hold expiry date (typically 120 days from application date). In most cases, it takes at least 6 months or more to build a home from the ground up. That means that you are taking a chance at what the interest rates and qualifying criteria will be several months down the road. You can normally only lock in 120 days prior to possession with a 'Completion Mortgage'. Lenders are constantly changing their guidelines and rates are predicted to increase over the coming months. That means you are much better to obtain draw mortgage financing to avoid any of these uncertainties. You will know that you have your financing in place right away before construction even starts. This is a huge peace of mind so you can relax and get ready for the big move.

A draw mortgage is the best way to purchase a home that is totally customized to your needs, tastes, wants and budget. Often, you may purchase a home that is already completed or nearing completion without a draw mortgage. However, you would not have the say in the floor plan, paint colours, flooring choices and so forth. Typically, most builders will not build a new custom home unless you can obtain draw mortgage financing.

Should you be able to obtain a completion mortgage on an exceptional basis, there is usually a premium added to the price of the home for doing so. This is because the builder would then need to finance the entire build (paying for trades, lot, materials, etc) and would, therefore, need to recoup some of that cost. That means a better purchase price can be negotiated.