There is only one appraisal done for a construction loan and that is based on the proposed and completed project. The appraiser will use the plans, budget, and specs to determine what the finished home will be like. It’s important to provide the appraiser accurate plans and detailed specs to give the appraiser a clear
It’s ideal for all parties to be at closing that need to sign. However, at times it’s just not possible. In cases where you will not be able to be at closing, you can have someone sign on your behalf by using a Power of Attorney (POA) form. You will want to make sure the
Mortgage lenders and banks today are required to fully document a file and prove they have determined the borrower has the “ability to replay” the loan. Because of this, there is more (a lot more at times) documentation that is needed for full approval. The items are considerably more when a borrower is self-employed or
Do I need plans and a budget for a construction loan? Yes. The appraisal on a construction loan is completed based on the plans, budget, specs and details provided to the appraiser. The more details you provide to the appraiser, the better chance for a favorable outcome. Essentially you want to give the appraiser enough
Can I refinance right after construction? Yes! Since the construction loans are ARM products, many clients will refinance shortly after construction is complete to a traditional 30 year fixed rate. Although the construction loan is for a 30 year term, the rate is not fixed for 30 years. Rate options are fixed for three, five,
Can I purchase and close on my new property at the same time as the construction loan? The answer is yes. However, depending on how much time you have, there can be some variables and time constraints. When you enter into a contract to buy a home or property, you have a contractual closing date.
Can I finance raw land or a vacant lot? The answert is yes. Raw land can be financed with a lot loan. Lot loans are slightly different than a “typical” loan or construction loan in that they have higher interest rates and may require larger down payments. The down payments may be 10-20% depending on
The loan process for a construction loan is not much different than a “regular loan”. There are a few additional items that are needed that relate to the construction project and appraisal, but the process and qualifications are very similar. If you qualify for a non-construction loan, you should qualify for a construction loan for
We in the mortgage industry ask that same question every day. The quick answer is because we do. The longer answer is that out of the financial crises of the late 2000s the Dodd-Frank Act was created which created the Consumer Financial Protection Board (CFPB) which created a rule called the Ability to Repay (ATR).
A construction loan is a mortgage loan that is used to help finance a construction project of various types. The loan and appraisal is based on the completed project. If you are purchasing a property that you will do the construction work on, the loan will be based on the entire project of land cost
A construction loan is a mortgage loan that is used to help finance a construction project of various types. The loan and appraisal is based on the completed project. If you are purchasing a property that you will do the construction work on, the loan will be based on the entire project of land cost
The construction phase begins after you close on your loan. It’s at the point your construction loan is in place and you can start drawing on it to complete your project. You will generally have 12-18 months to complete the project. That timeframe can be extended by exception at no cost. The most important thing
