REMEMBER: The original purchase price vs. today’s true market value
The true market value is the property value when building has been completed. This value is typically higher than the original purchase price.
Generally, institutional lenders lend on the original purchase price vs. the higher fair market value in the mortgage industry. If the borrower cannot obtain institutional financing at the time of completion, this could cause the transaction to fall through and potentially the 10% deposit lost
If the borrower has put down a minimum of 10% of the original purchase price, New Haven will use the higher market value when calculating the LTV.
New Haven will entertain up to 75% LTV of the true market value for owner-occupied properties provided the borrower has 10% skin in the game on the original purchase price.
New Haven will entertain up to 70% LTV of the true market value for rental properties provided the borrower has 10% skin in the game on the original purchase price.
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Please Note: If in the event the appraised value of the completed property comes in lower than the original purchase price, then New Haven will be forced to lend on the lower of the two.
*Other information will be required for final approvals such as rental acknowledgment(s) and assignment of rents*
To inquire about a New Build property, contact us today!