TMG HarbourTown Mortgage
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DEAL SCENARIOS

Land, a Build, and No Cash to Start

A client owned their land and wanted to build, but had no cash to begin, still owed money on the land, and was carrying debt that would block a conventional mortgage later. Here is how a carefully structured construction loan got the build done and ended with a conventional mortgage and no consumer debt.

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THE SITUATION

They owned their land and were ready to build, but had no cash to get started. There was still a land loan to pay out, and debt that would stand in the way of a clean takeout mortgage at the end.

THE COMPLICATION

Conventional construction financing did not fit yet. The build needed money up front just to begin, every draw would be tight, and the land loan and debts had to clear before any exit to a regular mortgage.

How We Structured It

  1. The Right Construction Lender. We worked with a construction lender we know well to arrange financing at a loan-to-value (LTV, the share of a property's value a lender will finance) that made the project workable.
  2. A First Draw That Cleared the Way. The first advance was sized to pay out the existing land loan and still leave enough to get the build started.
  3. Managing the Tight Draws. Later draws were tight, so we arranged multiple smaller advances and paid invoices from upcoming draws to keep the trades moving and the build on track.
  4. Clean Up Before the Exit. The plan cleared the outstanding debts along the way, not after, which set up a clean move to a conventional mortgage.
  5. Final Draw and Takeout. A final advance just before closing covered the last construction costs and remaining debts, and the construction loan was then replaced by a conventional takeout mortgage.

What Made It Work

A Lender Who Listened

Knowing the construction lender well meant we could structure the draws around the build, instead of forcing the build to fit the financing.

A Clear Exit From Day One

An alternative construction loan is only as good as its exit. This one was planned around the conventional takeout from the start.

Debt Handled Along the Way

Clearing the debt during the build, not after it, is what made the clean move to a conventional mortgage possible.

The result: a finished home, no consumer debt, and a conventional mortgage, in under ten months. Timelines and structures vary by file, but a build with a clear exit planned up front can get there.
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Planning a Build Without All the Cash Up Front?

If you own land and want to build but the financing feels out of reach, talk it through. We map the construction draws and the exit together so the project can get started and finish clean. A licensed member of our team will follow up.

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(902) 835-6420  |  contact@tmgharbourtown.ca

Every build is different. Construction financing depends on the project, the budget, your equity and qualification, draw inspections, and lender review and approval, and an alternative or private construction loan should always have a clear exit such as a takeout mortgage. Private lending is one option to review, not a default. We arrange financing; we are not your lawyer or accountant. Any figures are illustrative only and not a rate offer. This scenario shows how we think, not a promised outcome. Information here is general and educational, not financial, legal, or lending advice, and not an offer of financing.