From Foundation to Finish: Building your Home with CUA's Construction Mortgage

Have you been searching for your forever home, but the market options aren’t exactly what you’re looking for? Home ownership doesn’t always start with a For Sale sign, sometimes it starts with a blueprint. 

Whether you’re building a home from the ground up or eyeing an in-process build in a new development, CUA’s Construction Mortgage can help you break ground on making your dream home a reality. Let the building begin! 

Our construction mortgages offer competitive rates, flexibility and a clear path to build a home from start to finish. Qualifying is just like any other home mortgage, with as little as a 5% down payment, including when the land purchase and contract to build the home are bundled together. Our Financial Advisors can help guide you through the process step by step.

The Construction Mortgage is available to individuals or to contractors who may be working on behalf of clients.

Hard hats on, time to prepare.

To prepare for your first appointment with a Financial Advisor, we recommend having all the items required for a pre-approval ready, including your confirmation of income, and proof of assets.  You can find more information about these items and the benefits of pre-approval on our website. The pre-approval process allows you and a Financial Advisor to come to an agreement on a realistic mortgage amount based on mortgage payments you can afford.

Foundation first.

Turn-Key Mortgage: This is the mortgage you would qualify for if you have purchased a lot and home in an upcoming or newly developed neighbourhood. These often come with a variety of model or templated home options you can choose from. All timelines and quotes associated with this type of mortgage are dependent on the developer.

Contract Build Mortgage: This mortgage is for people who are hiring a contractor to build their home on land they already own or are purchasing separately. These generally require an advance for the contractor to buy materials and pay for the labour.  There are up to five advances CUA provides at pre-determined stages of development, and we will work directly with the contractor for any of the forms or documents needed at these stages.

Self Build Mortgage: This mortgage is recommended for people with experience and expertise to complete the work themselves. You will be acting as your own contractor and will need to subcontract out any work you may not be able to complete yourself (such as plumbing or electrical). CUA will be working directly with you for the documents and forms needed for different phases of the build.

If this is the route you choose, your progress will be assessed throughout the build to inspection standards, and all quotes and receipts for material used and sub-contractors hired must be retained if they are being reimbursed through the mortgage funding.

Breaking ground and digging into details.

Your Financial Advisor will follow-up with you at various phases of your construction for reports, permits, and inspections. Some examples of the documents required at various phases of construction are:

• Building Permits

• Copy of the house plan

• Insurance documents

• Property tax documents

• Inspection documents for footings, foundation, framing, drywall, plumbing, electrical

• CMHC/Sagen/Appraiser Reports

• Occupancy Permit

• Home warranty

In a contract-build mortgage, CUA works directly with your contractor for these items. If you are interested in a self build, we will require all these documents directly from you.

A self build construction mortgage also requires additional documents. Your Financial Advisor will provide a ‘construction worksheet’ that outlines all materials, inspections, and insurances needed to build a home.  

The main difference between a construction mortgage and a more traditional type of mortgage is how the funds are administered throughout the process. Unlike a typical mortgage, which is paid in a lump sum to the home seller on closing day, contractors require funds at different phases of construction.  CUA has an Advance Schedule for our construction mortgages divided into up to five advances for your project. 

First Advance: When the project is 15 to 20% complete.

Second Advance: Roof Tight – Approximately 35% complete.

Third Advance: Plumbing, heating, siding, Insulation – Approximately 50% complete.

Fourth Advance: When the entire project is 80% completed.

Fifth Advance: When the build is fully completed, following final inspection approval and Occupancy Permit obtained. 

Walls up, windows in. Bring it all together.

If a construction mortgage is in your future, or you would like to know more about other mortgage options available, please contact one of our Financial Advisors to discuss options and what mortgage product might be best for you. 

Please note: While we have provided some tips for how to have a successful first meeting with your Financial Advisor and what to expect in the process, all construction mortgage applications are unique. Our Financial Advisors have experience in many lending scenarios and can answer any specific questions you might have.  

To learn more about CUA's mortgage products, visit cua.com/mortgages