Construction Loan

We can make it easy. Like a lot of people, you’ve probably thought about building your dream home. But you might be concerned about the potential hassles: choosing a quality builder, counting on good weather and bracing yourself for those little surprises that could delay your schedule for days, or even weeks. Or the constant worry about coming in on budget. With all the things that could go wrong, why would anyone ever want to build in the first place?

There’s nothing like building your home, your way. With every detail in place, just the way you imagined. We’ll make the entire process as easy as possible for you, starting with the mortgage. So you can spend more time thinking about what you want to do.

To help you manage your budget a little easier, you’ll pay only interest on the money you’ve drawn. That means your payments will be less than they will be if you were paying principal, as well. Plus, you may get a bigger tax deduction for interest-only payments.

When you’re building a home, it’s always a good idea to plan ahead for the unexpected. Our optional contingency cash reserve is a built-in safeguard that will ensure you have enough money to complete the work-or make a few last-minute upgrades or other changes.

It’s easier than you might think. So you might be able to qualify for a larger loan.

This in-depth process helps ensure everything goes smoothly from day one. So both you and your builder have a good relationship. And the outcome is the dream home you’ve always wanted.

• Choose either a Fixed or Fixed to Adjustable Rate Mortgage
• Choose your construction term: 6, 9, or 12 months (extensions may be available)
• Competitively-low interest rate during construction AND during the permanent loan
• Low construction administration fees
• Loan includes all construction costs including permits, fees, etc.
• For new construction or renovation
• Construction loans for builders available

Since you are obtaining money on the finished value of a home not yet constructed, we will need to understand the total picture as clearly as you do. Therefore, in addition to standard credit documentation, we will need, at a minimum, the following documents to start the process:

• Your full application package.
• Final plans and specifications for the home. These are needed in order to obtain an appraisal that will reflect an estimation of the value at the time that construction is completed.
• Purchase contract for the lot (or Settlement Statement from the title company if you’ve already purchased it)
• Property profile – a description of materials to be used – we will supply you with the forms)
• Line Item Cost Breakdown from the builder – we can supply the forms
• Builder’s construction contract – the builder/contractor will supply it you
• Copy of the Builder’s/Contractor’s license
• Builder’s statement and/or signed authorization for credit rating

Additional costs will vary, and may include construction loan closing costs and fees and special insurance requirements. But don’t worry; your Construction-to-Permanent Loan can usually include on-site costs, off-site costs, closing costs, interest reserve, contingency reserve and lot purchase or value.

With our lender Construction-to-Permanent Loan program includes an interest reserve, which means that you will not have any payments out of pocket during the construction period. An interest reserve account will be incorporated within the loan amount. Depending on how quickly you use your construction funds; there should be sufficient funds within the construction loan to carry you through the entire construction period.

Initially you may have interest only payments on incremental funds drawn out until the house is completed. Generally speaking, this means that interest is charged only on the amount of funds used at any given point and time. Payments are interest only during the construction period, converting to principal and interest payments for the remaining term of the loan.