1.Construction loans are a limited commodity Not many companies offer construction loans in our region. Even online lenders are limited to the type of loan they can offer, and a construction loan is not one of them. We’re happy to announce that we do offer this type of lending.
2.The time frame is the same When you sign for a construction loan whether you’re building it yourself or if you’re hiring a ‘Class A’ contractor, you will have twelve months to build your home, which means you’ll see the light at the end of the tunnel from the very beginning.
3.It will save you money You will only pay interest during the construction phase of your loan so that the balance won’t decrease. But when your house is ready to go, your loan will be converted (refinanced) into a mortgage. This will save you money in the long run because you’re not paying interest on the entire value of the home until you’re living in it. Makes sense, right?
4.Your lender can handle it for you Your loan officer follows your construction progress every step of the way. There are usually about five or six draws in the duration of the loan (this is when a builder requests more funds to continue the next phase of construction.) Each time the builder requests the next draw, the lender will go to the site, and take pictures, monitoring the progress before issuing any funds to verify that the home is on schedule.
Your lender can also act as a liaison when you have questions about the build. They can even make recommendations when you need someone for inspections and other phases of the project.
5.The heart is where your home is Many lenders send their loans to underwriters in other cities, or they will sell your mortgage to another company to maintain the payments after it is closed. We’re fortunate to have our own underwriting team in house. And in most cases, we can keep your loan throughout pay off. Which means that the ‘heart’ of your mortgage will reside with us — locally, in the same town as the house you’re living in.
As it turns out, there has been another drop in rates as well. So what are you waiting for? Get to building that dream house that you’ve always wanted. Have questions? Call us. We’re always happy to help.804-435-1181