What is a Construction Loan?
A Construction Loan is a short-term, higher-interest loan that provides the funds required to build a residential property. The process of borrowing the funds to pay for the project is much different than getting a mortgage to move into an existing property.
Construction Loans typically last around one year. Within that year of using your Construction Loan, the property must be built and a certificate of occupancy must be issued.
What does a Construction Loan cover?
- Cost of the land
- Contractor labor (framing, roofing, exterior, interior finish, etc.)
- Subcontractor costs (drywall, electrical, plumbing, HVAC, etc.)
- Building materials
What steps should I follow if I want to
apply for a Construction Loan?
1. Commence the Renovation
- Come up with a budget (optional)
- Find a builder
- Contact NorthPort Funding to speak with a loan officer about your financing options
2. Course of Action
- Finalize the contract with your builder
- Apply for the loan
3. Complete the Contracts
- Review and sign your loan documents
Let the construction begin!
4. Caution: Under Construction
5. Construction Complete
Your loan will now transition into the permanent phase and become a traditional mortgage