There are several reasons that a person would need a construction loan. The first and most obvious reason would be to construct a home. One may also need a construction loan to remodel an existing home or to purchase an existing home that will require some additional repairs before putting a permanent loan on the property. A construction loan is a short-term loan that is a fixed rate and is usually from 6 to 12 months in length. We offer these loans on owner occupied properties as well as investment properties to build and sell. In many instances, our construction lenders will allow the borrower to be the General Contractor/Builder. These loans are available to borrowers from city lots to large acreages and from factory pre-built manufactured homes to million dollar mansions.

Down Payment: The down payment is usually 10% of the total cost of the loan needed. Again, as is the case of the land loan, we may be creative as to the equity the lender will require during the construction period if cash is not readily available. Even though we strongly encourage the borrowers to purchase their land at the close of the construction loan, sometimes that is not possible. Your equity in your land will be credited toward the down payment required by the construction loan. It is possible, depending upon your credit package and other compensating factors to do a loan for zero down!

Rates: The interest rate on a construction loan may vary depending, again, on location, creditworthiness, and the total loan package, and is tied to the prime rate on Wall Street. The rate for construction lending has been has been as low as 5.0% to 10.5% this past year.

Pre-qualifying

One of the most important steps in purchasing a home is to be pre- qualified or pre-approved. This step can eliminate wasted time in the purchase transaction. A pre-approval process can also be helpful in structuring your final goal. You may find something showing up on you credit report that is incorrect, or may need to do some debt consolidation in order to qualify for the price range you were interested in. We are there to assist and advise with any challenges that may come up.

A pre-qualification can be handled by telephone. This is followed up by a loan package mailed to you overnight along with the application, disclosures and a letter with a list of items that will be needed to complete the transaction. As soon as the documents are returned to us we are able to acquire an official pre-approval in writing from an investor within just a few hours. More complicated packages may require a few days. In any event, we meet our deadlines and commitments without any undue stress for anyone involved.

Please call us today or use our secure online pre-qualification form to get pre-qualified for your home.