Construction Loans


What is a Construction Loan?

Construction loans are typically short term, normally 11 months or less.    You will work with a builder to design the home they desire.  Then you must provide us a copy of all of the plans and specifications, with a full cost breakdown, along with a signed contract from you and your contractor.  Those items will be used by the appraiser to help in determining the value, which will include the value of the land where the structure is being built.   Like any mortgage, loan to value guidelines are in place.


What if I already own the land or it has a dwelling on the property?

Owning the land prior to construction will give you additional equity that can be used.  If your property already has a dwelling on it, and you are making a major addition, a construction loan may also be the perfect product to fit your needs.


What else will I need?

Funds will need to be verifiable for both the down payment requirements and also any reserve requirements for cost over runs.  Draws on the construction account will be paid to the title company, which will handle the lien waivers with the builder.  You will need insurance during the construction phase, which can be purchased with your local agent.


When does my construction loan change from interest only to monthly principal and interest payments?

Once the home is complete, an updated appraisal will be required for approval of permanent financing.  Standard income and assets will need to be re-verified, along with a new credit bureau report.  At this time you will also make the final decision for the term and interest rate of the loan.   Your interest rate will vary depending on the term of your loan.    For example a 15 year fixed rate loan may have a lower interest rate than a 30 year fixed rate loan.   Your loan officer will help you decide what product fits you best.


What is the first step?

It's easy !!   Get qualified by clicking on Get started today



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