Construction mortgages are not as readily accessible as traditional mortgages as they aren’t high in demand. Thus these are hard to get and are more complicated as they require multiple inspection checks in the construction.

Further, prior to each draw being advanced, an inspector will go to the property to ensure the builder is following the NHW (New Home Warranty) policies and to ensure each stage is completed with accuracy before releasing funds.

Due to the higher risk associated with construction mortgages, approval may require the availability of larger down payment up to 30% of the total amount, meeting stricter criteria beyond the typical minimum credit score and dependable income needed for a traditional mortgage.

Lenders must also be confident in the timely completion of the project, as well as the licensure and track record of the builders in delivering quality homes, among other considerations.

Therefore, it is highly advisable to seek the expertise of a mortgage broker or bank familiar with this type of mortgage to help navigate the complexities and clarify each step involved.