Construction Loans

 

 


So if you are looking for a Construction Loan, you need to read this first. I think you will find it helpful. If you have questions call Jaren at 510.215.1743, or "Get Qualified in a Blink" click on red button above.



 

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 Do You Want To Build Your Dream Home?

This What you Need To Know!


If you are interested in having a home built, you will probably need a "Construction Loan:", assuming you already own the property on which you want to build. Owning the land will provide some or all of the equity needed for the construction loans. However, this type of loan is not easiest to find. Since the great recession construction loans are harder to find. Specialist lenders, credit unions and regional bank transitionally do this type of loan. These loans are short term, usually don't exceed a year to complete the project, and the rates are higher than a standard home purchase loan. These loans are usually adjustable and interest only. This allows smaller payments to be made on the construction loan until the house is complete and is either payoff with a "Bridge Loan" or converted into a conventional 30 year mortgage once the Certificate of Occupancy issue.


The borrower will need to have your ducks in a row to gain an approval. He or she need to provide detailed plans, a realistic estimate of costs, and a timetable for completion. Assuming, the borrower gets an approval for the loan, it will be based solely on good credit, and a complete construction package or loan story. An account will be set up with a "draw" so that money is paid out as each stage of the construction is completed. For example the foundation completed, before the money for the framing will be released, and so forth until entire house it is completed. The lender will send someone to inspect each stage of completion and sign off at each stage of construction and for the last payment to be made when a Certificate of Occupancy is issued by the city or county''s building department. The contractor will release any mechanics liens and the contractor will receive the final payment by the lender. As mentioned above the borrower will have to pay the off the construction loan balloon payment, with a "bridge loan" and try to find a 30 year mortgage, or the original loan could be a "Construction-to-Permanent Mortgage", where the construction loan automatically converts into a 30 year conventional home mortgage by the original lender.


There are lenders who will provide funding for the lot, construction and the permanent financing through both conventional lenders, VA or USDA programs. Other lenders specialize in vacant land, farms and ranches, and the Section 184 Indian Home Loan Programs, which may provide ground-up to permanent financing as well. You might want to check out Niche Loans from the main menu at top of page or click here.

"My wife and I strongly endorse and recommend Jaren Dahlstrom, for your real estate needs. Five years ago, he helped us in acquiring our house, and two years latter assited us in lowering our mortgage payment. He is an expert, honest, trustworthy, and meticulous in securing purchase and refinance home mortgages and it will benefit anyone looking for home financing to use him."

Alberto and Eugenia L., San Pablo, CA

 

 

 

 

 

 

 



 

Copyright 2016 Jaren Dahlstrom, All Rights Reserved -- Jaren Dahlstrom, Loan Officer, CA BRE 01358563, NMLS 237999 -- United Lendinging Partners/United Realty Partners BRE #02012818, NMLS #1525816