Committed to making your mortgage approval process stress free and efficient for over 25 years, Sunlite Mortgage is one of Toronto, Canada’s leading mortgage brokerages.
As a developer, you will know the difference between a construction loan and a commercial mortgage. Your construction loan is designed to cover the cost of your build from start to finish, providing funding to purchase materials and pay contractors. A commercial mortgage, meanwhile, is your long-term financing solution post-completion.
Since you need to pay off your construction loan once your project is complete, it’s important that you plan for the conversion of your loan to a commercial term mortgage (unless you plan to pay off your loan with cash or sell the project).
While lenders recommend starting discussions about long-term financing options six months before completion, the earlier you get started, the better. In fact, initiating discussions with your lender twelve months before completion is advisable in the current climate.
Several lenders in Canada offer construction loans and commercial-term mortgages. Still, there are several factors to consider when deciding who to partner with and what kind of product to choose.
 | Speed of executionIn all business – particularly the construction business – time is money. And if you have a ready project– or that has already started – you don’t want your lender holding you back and creating a cash flow constraint for you if they are slow to deliver. A lender that executes quickly may be more valuable than a lender that offers the lowest rate. |
 | Your maximum exposureIf you have multiple builds at once, your lender may have a maximum risk exposure. If you have more than one project on the go, consider who your preferred lenders are, ensure they understand your financing needs, and become familiar with their constraints. |
 | Total amount of financing requiredBefore you approach your lender, you’ll need to determine how much financing you’ll need. Having your numbers in order will help potential lenders understand what you’re looking for and quickly determine what they can offer you. As you calculate your numbers, consider:
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 | The affordability, sustainability and accessibility of your buildingOne of the newest and most innovative construction financing solutions available today is CMHC’s MLI Select multi-unit mortgage loan insurance product. Through MLI Select, developers can access reduced premiums, lower cost financing, lower debt service thresholds and longer amortization periods based on the project’s level of commitment to affordability, accessibility, and/or energy efficiency. The more committed you are to social and environmental outcomes, the better the incentives available. |
At Sunlite Mortgage, our Commercial Mortgages Team understands the construction process and the financing needs of every step of your project. Look at our Vertical Construction Loans if you’re ready to start your project.
Throughout the lifetime of your project, we remain committed to being flexible and supportive, helping you realize your plans and operate your business effectively. Because the needs of commercial developers are diverse and dependent on the project’s size, scope and location, we offer a range of conventional and insured financial solutions. We will create financing programs to meet your specific requirements while ensuring quick execution.
Contact our Commercial Mortgage Team to see how we can assist and guide you through the process.
