Anbros Financial has developed a standardized approach to financing infill custom home builds. Below provides a summary of our standardized structure.
Maximum Loan Amount (Land + Construction) = 70% of the AS BUILT value of the house
Loan funds can be used to finance the following cost line items:
- Lot value / purchase price: $1,000,000
- Size of house being built: 3,000 sq.ft.
- As built / End value of the house when complete: $2,500,000
- Hard cost of construction: $750,000
- Soft cost of construction (project mgmt, marketing etc..): $50,000
The first step would be to calculate the maximum available loan amount that can be provided to finance the project.
Maximum Loan available = 70% of the AS IF BUILT value of the house
= 70% x $2,500,000
Now that the maximum loan amount has been determined, the next step would be to calculate how the loan funds will be released to the Borrower.
There are 2 scenarios:
- 1st Mortgage: We would payoff the existing 1st mortgage lender (if one exists) and register our
mortgage in 1st position on the property.
- 2nd Mortgage: We would register our mortgage in 2nd position behind the existing bank
lender and fund the construction costs.
1st Mortgage Scenario:
Loan funded against the building lot / paying off existing 1st mortgage
= 70% of the Lot purchase / appraised value
= 70% x $1,000,000 = $700,000 (amount funded on loan closing)
Loan released to finance hard costs of construction
= $100% x $750,000
= $750,000 (released in draws as construction progresses)
Total Loan = $700,000 against lot + $750,000 released as construction progresses
Total amount of the loan required to finance this project: $1,450,000
Maximum amount of loan that the project would qualify for: $1,750,000
Surplus loan availability of $300,000 can be set aside for construction contingencies
Typical Rates and Fees:
- Interest rate start at 6.50% for developments without presales.
- Interest rate start at Prime + 1.25% for developments with presales.
- Application/Lender Fees start at 1.50%
The following information is required to start processing loan requests:
- Completed Anbros Application application (download below)
- Purchase agreement of the Lot
- Existing Mortgage statement (if applicable)
- Completed hard cost budget form for the house being built (download below)
- Architectural drawings of the house being built.
- Estimated End Value / As Built value of house
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Oakville, Ontario, Canada. L6H 6P5