How to qualify?
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.
What’s next after the home is built?
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.