Can't find the perfect home to buy? Looking to build the home of your dreams? Or maybe, you're thinking it's the perfect time to renovate the one you currently call home? The process of borrowing the money to pay for this project is different from getting a mortgage to move into an existing property. We have compiled a comprehensive guide for obtaining a construction home loan. We offer renovation Loans, Construction Loans, and Lot Loans to build your dream home.
Construction Loan Basics?
What Is A Construction Loan?
What Does A Construction Loan Cover?
Are There Higher Qualification Requirements For Construction Loans?
The Home Construction
Loan Process Explained
Building the home of your dreams is exciting. Just as a solid foundation is important to any well-constructed house, financing is critical to the construction process as a whole.
Construction Loan Resources
When you work with NorthPort, you’ll receive prompt, personal service that enhances your borrowing experience. We provide real-time updates & market data, that keeps you updated every step of the way, creating a simple and transparent experience. With NorthPort, you can expect a high touch and high-tech experience. Our Instant Prequalify Technology allows you to see if you are qualified to buy a home without affecting your credit score. We have built a business that is recognized for integrity, excellent service and efficient processes.
Knowledge Is Power
Can I Use Any Excess Funds For Home Furnishings?
We understand your desire to make your new home picture perfect. Wouldn't that be sweet? Get that fancy cushy couch and massive flat screen TV and the living room is ready to rock. Sorry, but borrowers never actually touch the funds made available through construction loans because they’re paid directly to the builder.
Do Construction Loans Cover The Design Phase Of Home Construction?
Sorry, another no here. Prospective custom home builders have to self-finance the design phase of the home building contract. In addition, before you can take out a construction loan, you’ll need to produce a builder’s contract, construction timetable, designs and a realistic budget. All this needs to be done even before beginning the loan application process.
How Much is the Down Payment on a Construction Loan?
A 20% to 30% down payment is typically required for new construction, but some renovation loan programs may allow less. For example, the FHA 203(k) program allows down payments as low as 3.5%. As with all mortgages, the minimum credit score, maximum debt-to-income ratio and down payment required for a construction loan will all play a role. Don’t get overwhelmed by the process. Instead, let’s explore your options with an expert Loan Ninja at NorthPort Funding.
How Do Payments Work On A Construction Loan?
Plain and simple-your monthly payments on a home construction loan are interest only! Prior to the completion of construction, you only make interest payments. Repayment of the original loan balance only begins once the home is completed. These loan payments are treated just like the payments for a standard mortgage plan, with monthly payments based on an amortization schedule.