Time Line for
Construction Loans
The Six Milestones to the Successful close of a Construction Loan
<< Continued from Previous Page
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How
do you know if he is experienced? Ask for a full construction loan
budget and ask how the process works. At the first sign of
hesitation, thank him/her and move on.
Milestone 1: Lot is chosen and
you have entered into contract.
Complete
the construction loan application.
At this stage you can complete the construction loan application
despite the fact that you can not supply detailed information on the
construction project or the contractor. The lender can open the file
and start work on what’s known as the credit package, meaning
everything to do with you, your credit and employment.
Milestone 2: Basic Architectural
Plans Are Ready.
You
have already chosen a contractor or two and have asked for bids. Now
your construction lender can get a set of plans (working drawings
are not needed at this stage.) and a basic line item cost breakdown
from your contractor which will enable them to order a construction
loan, future value appraisal report.
Milestone 3:
Appraisal and contractor packages are ready.
While
the appraiser was doing his/her thing your detail working plans were
getting ready, engineering was getting done and the contractor is
working on detail cost breakdown, materials list and builder’s
credit application.
Milestone 4:
Construction Loan Package is submitted to underwriting.
Appraisal
report and builder’s package are ready and submitted to the
construction lender who has by now everything to submit the loan for
a final approval to underwriting. Note that you are still not done
with process as you have no construction permits yet.
Milestone 5:
Plans are submitted to the City/County for Plan Check.
In
most cases this stage happens concurrently with stage 4 or even a
little sooner. Depending on your local authorities this part can
take anywhere from a couple of weeks to 3 months or more. Also the
plans may be returned for some adjustments if they are found to
violate a local code or something that was missed by the architect
or the engineer.
Milestone 6:
Permits are issued and submitted to the construction lender.
Guidelines
for some construction loans will require the permits to be issued
while others may accept the plan check receipt (proof that plan have
been submitted and the fees paid) to issue a final loan approval and
issue the closing documents.
And
viola! You are done with the first and most important phase of your
construction loan process. Now you are ready to start the real
challenge of building your dream home.
Questions?
Call us Toll Free
or Send an Email,
with any questions or concerns that you may have. Visit Our
State Specific Contact Page,
where you can find our phone numbers to call us, contact us by email
or complete our short, secure application form.
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