You have made the decision to build a new home. You go out and tour a few custom home builders to get a feel for the floor plan, fits and finishes the appeal to you. Each new home builder suggests that you get approved for new construction financing to build your new home. You try not to show panic or run out the door! The builder representative hands you our card. Problem solved!
We get calls every day from clients that have limited experience with mortgage financing, let alone new construction financing. With confidence that comes from experience, we can be your tour guide that lays out the steps for new home construction that are easy for you to walk down. 20 minutes on the phone with us can save you time, money and keep you away from a whole lot of stress!
Today’s custom home builders may want you to secure the financing for the construction of your home for several reasons. When you finance the construction of your home you save money on interest on carrying costs that the builder does not pass on to you. The rate and fees that are charged for the builder to finance construction are more than the rate or fees you pay when the loan is in your name. By excluding the financing charges, the price of your new home will be less for you. When you put the new construction loan in your name, with lower financing charges, you save money.
Construction financing is an interest only line of credit to build your new home. Your builder will provide us with all the new construction exhibits (plans, specifications and contract to build) and we appraise the project as if it were complete. The value of the finished product is an important part of establishing how much we lend. Most homes can be built in 90 days to 120 days from start to finish, and our standard construction loan is for 6 months. We go longer (a max 12 months) based upon the scope of the project. During the time of construction money will be disbursed from your line of credit to make progress payments for materials provided and work completed. You approve every draw, our title company will verify that all the paperwork is in order verify that no mechanics liens have been filed by anyone that has provided materials/work for the project and that all lien waivers have been collected. Lien waivers are the written acknowledgement of payment received for work completed.
The appraiser that provided your initial appraisal will be inspecting the work every step of the way to protect us from paying for work that has not yet been performed. And, when the home is complete and all work has been done per your plans and specifications, the appraiser performs a final inspection so that we know the final disbursement of funds can be done and your permanent end loan financing can be put into place.
We have a process that works like a well-oiled machine. We leave nothing to chance and you will end up with the home you want, the permanent end loan mortgage product you want and no worries about having missed paying someone along the way. Let us take the complex and make it “easy” for you!