What extra documents are needed for construction?
Joel Olson • July 28, 2017
When doing a construction mortgage, there are several other documents that you will need to supply:
Some of these documents cannot be supplied till after financing is approved, but all documents must be supplied
prior to a second draw.
For a look at how construction works check out our video on it:
http://www.showme.com/sh/?h=QFHycdc
- Blueprints/Plans
- You must have plans for your house that you are building. The plans that you submit to us, must be the plans that have been approved by the city. They are also the plans that the appraiser will rely upon.
- Construction Contract - You must have a contract with the builder you are using outlining all costs, timelines, and terms they are wanting from you. Common issues with builder contracts are:
- Cost Plus Contracts - This is where a builder has the ability to increase the cost as the project goes. There is really nothing more dangerous than this. A contractor will need to provide you with a Fixed Cost Contract , which means the price is fixed the same. However, you must be aware that if you change anything in the contract a contractor can change their price.
- Builders Liens - The government requires 10% to be held back of every draw. When a contractor puts in the contract that you are to ignore this, be aware - this is illegal . Here is a great article on how this can effect you: http://www.lawsonlundell.com/media/news/253_BCBuildersLienAct.pdf
- Payment Schedule
- You will generally be given four different draws at quarterly stages. Unless, you have cash reserves in which to pay in the interim, a construction mortgage will not allow getting paid every two weeks or weekly. Payment are made on completion and not on time frame.
- Detailed list of quotes and contractors building the house
- The above contract should have it, but if you are
self-building you will have to supply.
- Building Permit
- Home Protection Office Registration
- You must register and receive a certificate for this.
- New Home Warranty
- You must get this regardless of whether you are self-build or contractor-build.
- Site Survey
- Cost of Construction Fire Insurance
- You must get insurance PRIOR to building on the lot.
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Ready to Buy Your First Home? Here’s How to Know for Sure Buying your first home is exciting—but it’s also a major financial decision. So how can you tell if you’re truly ready to take that leap into homeownership? Whether you’re confident or still unsure, these four signs are solid indicators that you’re on the right path: 1. You’ve Got Your Down Payment and Closing Costs in Place To purchase a home in Canada, you’ll need at least 5% of the purchase price as a down payment. In addition, plan for around 1.5% to 2% of the home’s value to cover closing costs like legal fees, insurance, and adjustments. If you’ve managed to save this on your own, that’s a great sign of financial discipline. If you're receiving help from a family member through a gifted down payment , that works too—as long as the paperwork is in order. Either way, having these funds ready shows you’re prepared for the upfront costs of homeownership. 2. Your Credit Profile Tells a Good Story Lenders want to know how you manage debt. Before they approve you for a mortgage, they’ll review your credit history. What they typically like to see: At least two active credit accounts (trade lines) , like a credit card or loan Each with a minimum limit of $2,000 Open and active for at least 2 years Even if your credit isn’t perfect, don’t panic. There may still be options, such as using a co-signer or working on a credit improvement plan with a mortgage expert. 3. Your Income Can Support Homeownership—Comfortably A steady income is essential, but not all income is treated equally. If you’re full-time and past probation , you’re in a strong position. If you’re self-employed, on contract, or rely on variable income like tips or commissions, you’ll generally need a two-year history to qualify. A general rule: housing costs (mortgage, taxes, utilities) should stay under 35% of your gross monthly income . That leaves plenty of room for other living expenses, savings, and—yes—some fun too. 4. You’ve Talked to a Mortgage Professional Let’s be real—there’s a lot of info out there about buying a home. Google searches and TikToks can only take you so far. If you're serious about buying, speaking with a mortgage professional is the most effective next step. Why? Because you'll: Get pre-approved (and know what price range you're working with) Understand your loan options and the qualification process Build a game plan that suits your timeline and financial goals The Bottom Line: Being “ready” to buy a home isn’t just about how much you want it—it’s about being financially prepared, credit-ready, and backed by expert advice. If you’re thinking about homeownership, let’s chat. I’d love to help you understand your options, crunch the numbers, and build a plan that gets you confidently across the finish line—keys in hand.
