Building a Home


Encompass Credit Union is pleased to provide Residential Construction Mortgages to our members. The process is outlined below:

Don't feel like reading? Watch the same information in an Animated Video!


1. PICK A PLAN

Choose a home plan that you want for your land and purchase blueprints or choose one with your builder. Determine square footage and make decisions that will affect cost (eg. how you plan to heat the home or if you are going to fully finish the basement or just partially finish it).

2. VISIT YOUR CREDIT UNION

Our Experienced Mortgage Professionals can walk you through the process and work with you to help streamline the process. You have many decisions to make and we'll help you. Your mortgage professional will help you determine what kind of approach will work best for you and help you to determine the next step. They will also calculate the maximum mortgage that you can qualify for and let you know what the approximate mortgage costs will be.

3. PRICE OUT THE PROPERTY

If you have funds from your own resources, you can purchase the land on which the home is to be built in advance of the construction mortgage being written. This can be considered part of your equity. However, we do not recommend that you purchase your lot prior to a mortgage being approved.

4. OBTAIN A CONTRACTOR'S QUOTE AND PREPARE A 'COST TO COMPLETE' FORM

This will help you to determine how much money you will need to build your home and complete the project. Remember to include GST. This takes into account everything from installing the services if your land requires that, to the interior and exterior finishes, the roof system, flooring, fixtures and even landscaping. A 'Cost to Complete' form can be provided upon request.

5. OBTAIN AN APPRAISED VALUE

Take your quote with the plan or blueprints to a certified appraiser and request a 'Blueprint Appraisal'. This cost will be your responsibility and the same appraiser must be prepared to come out to do progress inspections during your building project. You will need to provide the appraisal firm with specific information including your contractor's quotes and material specs in order for them to determine a value. The reason is that there are so many factors that affect the value of a finished home.

6. VISIT YOUR ENCOMPASS CREDIT UNION MORTGAGE PROFESSIONAL A SECOND TIME

Once you have provided your mortgage professional with the information they requested at your first meeting, we can begin to put an application together. Now that you have established what your home will cost you and what the finished value will be, bring your information to your Mortgage Professional. At that point, we can do our best to structure a construction mortgage to suit your needs.

We have multiple financing options including Genworth Financial, CMHC or Conventional financing. Only after approval has been provided can Confirmation of Financing be provided to your builder or contractor.

7. REGISTERING YOUR MORTGAGE

Your mortgage must be registered with Land Titles by your lawyer and these costs are not included in your mortgage amount. No funds can be advanced from the mortgage proceeds before the mortgage has been registered with Land Titles; this process usually takes two to three weeks.

8. ADVANCING YOUR MORTGAGE

Your signed contract with your builder or contractor will outline how much they will be looking for at particular stages. Encompass Credit Union will advance funds on a Cost to Complete basis, usually in five advances. They are loosely termed as:

i. Basement/Backfill
ii. Lockup
iii. Drywall
iv. Finish
v. Holdback funds released

Your own funds must be fully used first, and then we will begin to advance the mortgage funds. The appraiser who completed your blueprint appraisal must go out and inspect the work. We will be provided with a Progress Inspection and we will advance funds based on the percentage of work completed, less a 10% holdback amount. For example, if the home is 61% complete, we would advance funds to reflect that. The 10% holdback amount will be released in one lump sum 45 days after the final inspection of the completed home.

Your Mortgage Professional will discuss this process in detail with you during the application process. We understand that this is a very involved process and it can become very complicated. It is our hope that following the steps outlined above will help to streamline your building project. Please do not hesitate to contact your Mortgage Professional at any time with questions and they would be happy to help you find the answers.

ENJOY THIS PROCESS - IT'S AN EXCITING TIME!


New Home Buyer Protection Act

NEW HOME BUYER PROTECTION ACT

Did you know that as of February 1, 2014, every new home built in Alberta is protected under warranty, thanks to Alberta's New Home Buyer Protection Act?

Learn More about the New Home Buyer's Protection Act
 

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