The mortgage lending industry offers more options than people think.
If you have ever planned every aspect of your house and always dreamed of having a one of a kind home then a Construction Loan might be for you. Construction loans are what make home customization possible and allow the borrower the unique opportunity to be actively involved with the construction/ remodel of their home, from start to finish.
Here are a few important details to remember before taking on a construction loan project.
Reach out to a NOVA® Home Loans loan officer to discuss your different financing options. A loan officer will review your liquid assets and help guide you through the mortgage lending process.
The most common mortgage options for construction loans are Two-Time-Close and One-Time- Close Constructions Loans.
- A Two-Time-Close loan covers the construction of the home while the second covers your mortgage. Both loans contain separate fees and interest charges. 1
- A One-Time-Close loan allows you to underwrite the entire project at once with only one closing fee. You are also in full control of your own loan and will make interest only payments on any withdrawn amounts during the construction phase. Once the home is completed and the home goes through a final inspection then the loan turns into a single fixed rate mortgage.
The architect, contractor or homebuilder you choose will provide most of the required documents. The lender will also be able to guide you and your preferred builder in completing some of these requirements:
Architectural plans for appraisal (If any, for both the plot and the site) signed off by borrower and builder
Contractor’s IRS Certification
Copies of the list of materials needed as well as a total cost estimate (signed by builder/architect)
Details of purchase with legal description of property
Septic/well reports and permits
Any additional permits and licenses
Course of Construction Insurance: (The builder’s risk policy that provides insurance coverage for the build during the construction phase.)
Any other forms the lender may deem necessary to proceed with loan
Any training courses required in order to originate a loan
Choose the loan type that works best for your construction and start looking for a homebuilder. Set up meetings and interview with architects and homebuilders.
Assign a project manager. Whether that be you or a homebuilder, your construction project will need to stay on track in order to access funds from the loan.
If building from the ground up, you may want to hire soil technicians to help survey the land you wish to purchase for your build.
Start looking into the type of appliances and materials you wish to use. (Durable, energy-efficient, high grade).
Get familiar with the construction loan process and start building the home of your dreams. Roll up your sleeves and give your NOVA® Loan Officer a call to learn more about Construction Loans.
- Program/ offer may not be available.
The information contained here is educational only. Other conditions and restrictions may apply. Rates and available programs are subject to change without notice. Contact your loan officer for more information