Construction Loan Process

Key Stages:

• Pre-Approval:

  Lender assesses your financial situation and determines the maximum loan amount you qualify for.

• Application and Documentation:

  Submit a detailed loan application along with construction plans, blueprints, and builder information.

• Underwriting and Approval:

  Lender evaluates your creditworthiness, project feasibility, and the builder's qualifications.

• Closing on the Construction Loan:

  Sign loan documents and pay closing costs.

• Construction Begins:

  The builder starts work, and you'll make interest-only payments on the disbursed funds.

• Draw Schedule:

  Lender releases funds in phases based on construction progress and inspections.

• Construction Completion:

  Final inspection and approval from the lender.

• Conversion to Permanent Mortgage (if applicable):

  The construction loan converts to a traditional mortgage with principal and interest payments.

Loan Options:

• Construction-to-Permanent Loans:

  One loan that covers both the construction phase and converts to a permanent mortgage upon completion.

• Construction-Only Loans:

  Short-term loans that finance only the construction phase, requiring a separate mortgage after completion.

• Owner-Builder Construction Loans:

  For those building their own homes, with stricter requirements and potentially higher interest rates.

• Interest Rates:

  Construction loan rates are generally variable and slightly higher than traditional mortgage rates due to the increased risk for lenders. Rates fluctuate based on market conditions and your individual financial profile.

• Contingency Plans:

  It's wise to have a contingency fund (typically 10-20% of the budget) to cover unexpected costs.

• Change Orders:

  If significant changes are needed, you'll likely need to submit change orders to the lender for approval and potentially provide additional funds.

Your Trusted Partner:

• Expertise in Construction Financing:

  We have a deep understanding of the construction loan process and its complexities.

• Personalized Service:

  We provide tailored guidance and support throughout your project.

• Competitive Rates & Terms:

  We offer competitive rates and flexible terms for construction loans.

• Streamlined Process:

  We leverage technology and expertise to make the loan process efficient and stress-free.

• Commitment to Your Dream Home:

  We're dedicated to helping you build your dream home and navigate the financing journey with confidence.