Construction loans are short-term contracts at a fixed rate, usually expiring after six to twelve months. Construction loans in Colorado help a variety of individuals and businesses to achieve their goals. Borrowers using Colorado construction loans have varying goals. They range from constructing personal homes to remodeling existing homes and purchasing existing homes that need repairs, to General Contractors and Builders obtaining construction loans for building investment properties and businesses.
At Taylor Mortgage Group, we endeavor to put together the best construction loans Colorado allows. Essentially, our construction loans consist of owner occupied properties, investment properties, and spec homes and buildings for either city lots or for large parcels of Colorado real estate. We have sources of new construction loans to cover the entire gamut of buildings, from pre-built manufactured homes to high-end estate homes.
To begin the process of obtaining a new construction loan anywhere in Colorado or in the Denver area, it is important to follow the steps to becoming pre-qualified or pre-approved. Pre-qualification and pre-approval processes make it faster for buyers to purchase properties. Pre-approval sets the buyer on the road to achieving success by anticipating problems ahead of time, problems that may show up on credit reports or require debt consolidation.
Official pre-qualification can begin over the phone, followed with paperwork. The lender sends out a loan package, loan application, disclosures, and correspondence listing the documents required to complete the loan. After the requested information, our offices turn around the official pre-approval papers backed by an investor.
At the time of application, buyers must normally produce 1) a down payment representing 10 percent of the total cost of the project on loan, or 2) a sizable down payment along with substantial equity. Nonetheless, depending on many elements of the credit package and other compensating factors, at times we can find loans with zero down payments.
Interest rates vary. They depend on several factors including location, credit, total loan package amount, and current prime interest rates.
At the beginning of the construction loan period, borrowers are encouraged to purchase the land. Equity accumulated during the construction loans is credit toward the down-payment requirement for the new loan.