The construction program is generally paid out based on work completed. However, deposits can be obtained for custom items where its’ typical for the provider to require a deposit. Items such as cabinets, windows, and counter tops can generally get a deposit with the final balance provided when they are on site and installed. For
Being prepared to apply for a mortgage can be very helpful in making the process smoother. Mortgage companies are required to “fully document” a file. Below are a few items that can ensure your loan application is not derailed, and will also limit the amount of documentation needed. Income Don’t Change Jobs: Changing jobs just
If this is your first time doing a major rehab project or building a home, there will be some challenges and frustration along the way. Fortunately, when it’s all done and your vision realized, it will be well worth the time and effort. Some of the keys for a successful project are: Be Patient I’m
When you should start the loan application process will depend on your scenario and a few factors. If you are purchasing a property (or lot) at the same time you closing on the construction loan, you should apply as soon as you have an agreement with the seller to buy the property. If you already
Being out of balance means you don’t have enough funds remaining in the loan based on the costs needed to complete the project. This generally occurs when the costs of the project have increased from the original budget. For lenders it is important that there are sufficient funds available in the loan to complete the
Yes you can, but it can complicate things if not done correctly. At times clients will want to start their project before the loan has closed. Items to consider are: Permits: Permits are not required to close but are required at the first draw. Be very sure those are available by that time otherwise there will
The construction phase is the period of time your home is under construction. Once your home is complete, the loan moves to the permanent phase with payments of principal and interest. Every construction phase is initially setup for 12 months. If you use less time, the loan will move to the permanent phase once your
Our goal in our draw process is to allow your builder to spend as little time as possible with paperwork so you can concentrate on completing a great project. At the same time the bank needs to balance the risk of being overdrawn on a project that may run out of funds before it’s complete.
It is possible, but the process to switch builders after you close (and before completion) can be quite time consuming. The most common reasons homeowners want to switch is due to disagreements on costs and excessive delays. When a homeowner wants to change builders, both the lender and the title company will have certain requirements.
No. The purpose of the inspection is to confirm whether work that is being requested to be paid out has been completed. It is important that you understand the specifications of your construction contract and monitor the work is complete to your standards. The inspection report that is completed by inspector is to confirm the
You can, but it is not recommended. Remember, the construction loan is a regular mortgage. When you pay down a regular mortgage, you can’t draw funds back out without refinancing the loan. The construction loan works the same way. If you have, say, a $300,000 construction budget and decide to pay it down during the
Yes. At times it may be necessary to pay for a construction item prior to the funds being drawn from the loan. This may be necessary due to timing or a deposit the builders wants, but the lender will not allowed to be paid out. Whatever the reason, as long as the costs are documented
