Construction Loans for building the home you want from the foundation up.
Have you searched for the perfect home but cannot seem to find it? Housing inventory is down a bit, and finding a home that checks all the “boxes” for you and your family can be difficult and time-consuming, to say the least. Many homes check some of the boxes for you, but not all. The locations of the properties also may not be the right fit. This can push you as a consumer to compromise your home needs.
Do you need to compromise your wants and needs list when deciding on your home? No, you can build your own home. Here’s the secret, it’s not as hard as it may seem!
How Does It Work?
- Find your land
- Submit design plans for the home, financials, and project timeline to the lender.
- One year to build the home
- You make interest-only payments during the construction phase
- Throughout construction, an appraiser or inspector assesses the build at key intervals to authorize more funds.
- Once construction finishes, the borrower repays the mortgage as agreed.
A residential construction loan is a type of loan that helps you finance the building of a new residence.
The construction loan is typically divided into two parts: the construction phase and the permanent phase. During construction, you receive funds to cover the costs of building your home, which is paid out in installments as the work progresses. This helps you to manage your cash flow and pay your contractors on time. During this time, you only pay the interest toward your new mortgage, thus lowering your obligation during the construction phase.
Once the construction phase is complete, your loan will enter the permanent phase, where the loan will be converted into a traditional mortgage. At this point, you’ll begin making regular monthly payments to repay the loan over time.
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What can be included in a Construction Loan?
Permits, Cost of the Land, Building Materials, Contractor Labor
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What type of loan programs can you use for Construction Loans?
VA - primary residence only | Conventional - primary, secondary, and investment properties | ARMs 7/6 and 10/6 ARMs
Building your own dream home is not a dream after all. We can help you make it a reality.
