Construction Loan Article Center

Tuesday, May 29, 2007

18. Does The Construction Lender Really Need All This, Including Information On The Builder?

Not only does your lender need all this information, but also he/she could require even more!

Their role in this process is very important, and they need all the information possible to research the project and the builder.

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17. What Will I Need to Show My Construction Lender in Order to Review My Loan Request?

Not only will your lender need standard credit documentation, but also, in order for your lender to see your vision as clearly as you do, your lender will want copies of the following:

1- Final architectural plans and specifications to obtain an appraisal.
2- Purchase contract for existing lot (or Closing Statement if you've closed the purchase transaction).
3- Description of Materials.4. Line item cost breakdown prepared by the contractor.
5- Your Contract with Builder.6. Copy of the contractor's license.
7- Builder's statement or application.

Don't forget: Get the necessary building permit for YOUR community!

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16. I know people who recommend I get a single-close loan. What exactly is that?

Up until recently, if you wanted to build a new house, you had to obtain two different loans, often with two separate lenders. This made it necessary for the borrower to qualify two separate times: once prior to the construction loan then again prior to the long-term loan. Another negative aspect of two separate loans was the presence of two sets of closing costs. Single close loans, on the other hand, encompass not only the construction periods but the permanent loans as well.

Additionally, there are two sets of closing costs.

We offer a single-close loan, called a Construction-to-Permanent loan, with a 6, 9, 12 or 18 month construction period and a 15-or 30-year fully amortizing permanent phase. We also offer rate protection during both phases of the loan and a rate roll down option.

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