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The custom construction loan is a specail loan where you finance the construction phase of the home with an automatic "rollout" into a final mortgage when the home is complete.
Reasons why people select the custom construction loan include:
Control of the building process and draws
Desire to make all the design and specification choices for the home
Savings of closing costs since there is only one total loan
They already own the property and do not want to move the title into the builder's name during construction
Custom Construction Loans are available for up to $2.5M (or more). The average construction loan allows up to 12-months to complete the home from the start of construction to your obtaining a permit of occupancy.
We work together, often for several months, as you complete your plan selection, builder choice and specific building materials. Often we pre-approve your creditworthiness early on and update your file once you are ready to start construction. To obtain your final approval for a custom construction loan, you need the following:
Complete mortgage credit approval
Copy of Plans and Specifications
A detailed cost breakdown
Your contract to build with your builder
An appraisal (we order this) to determine a value of the property once it is complete
A contract to purchase the land if you do not already own the property
How the Construction Loan Works: Before you break ground, the construction loan is closed. The funds are allocated monthly during construction to pay the bills for work that has been completed in the previous 30-days. The final loan advance pays for the final construction costs.
Choose from Fixed Rate or Adjustable Rate loans
We TAILOR your Construction-Perm Loan to meet your needs.
Don't confuse a "presale" homeloan with a custom construction loan. A New Construction Presale, is a home that is built by a developer/builder who controls the financing of the construction phase. You simply wait until the home is complete and close your home loan. You are welcome to obtain an 'extended lock' on an interest rate so it will be available when the home is completed and you close your home loan.
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