Construction Loans
Building your dream home is an exciting but intimidating endeavor. It is important to understand your financing options. With a construction loan from The Southern Bank, you can access the capital you need to break ground on your new project. We’re a local, trusted financing partner with over 85 years of experience serving customers just like you.
A home construction loan is a short-term, higher-interest loan that provides the funds required to build a residential property.
The rates for construction loans are generally higher than mortgage loan rates. Whereas a traditional mortgage uses your new home as collateral against the loan, a construction loan cannot because there is no property yet. Because of that, the bank is taking a larger risk as the lender.
Before qualifying for a construction loan, you’ll need to make sure you have all your plans put together for the new build. That would include a detailed construction plan (i.e. from an architect or builder) as well as a timeline and budget.
Once you get approved, the lender will put you on a funding schedule that follows the timeline of your build. For example, you may need $50,000 for excavation work up front, the $100,000 a month later for frame construction and finishing materials. This is unlike a personal loan, where the lender gives you all the money up front (lump sum). Instead, it drips into your account on a schedule as you need it for construction.
After the home is built, you may also be able to convert the original construction loan into a traditional mortgage – known as construction-to-permanent lending. For more information about this, or any other questions about construction loans, talk to one of our representatives today.
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Address:
221 South 6th St
Gadsden, AL 35901
Phone Number:
(256) 543-3860
Business Hours:
Monday thru Thursday, 8:30 AM to 4:00 PM
Friday, 8:30 AM to 5:00 PM
Drive-Thru Only; Lobby Available by Appointment; Closed Daily 1-2 PM for Lunch
Address:
625 East Main St
Albertville, AL 35950
Phone Number:
(256) 878-0314
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Friday, 9:00 AM to 5:00 PM
Address:
390 West Main St
Centre, AL 35960
Phone Number:
(256) 927-5588
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Monday thru Thursday, 9:00 AM to 4:00 PM
Friday, 9:00 AM to 5:00 PM
Closed Daily 1-2 PM for Lunch
Address:
2204 Henry St
Guntersville, AL 35976
Phone Number:
(256) 582-3197
Business Hours:
Monday thru Thursday, 9:00 AM to 4:00 PM
Friday, 9:00 AM to 5:00 PM
Commercial Finance Division
Address:
2151 Highland Ave
Suite 330
Birmingham, AL 35205
Phone Number:
205-868-1515
Business Hours:
Monday thru Thursday, 8:30 AM to 4:00 PM
Friday, 8:30 AM to 5:00 PM
