Finding the perfect house can be a fun, yet challenging, endeavor. With so many factors to consider while house hunting – including style, size and location, just to name a few – it can be tough to know where to start. Even if you can’t find the perfect home, you can build a new one that is just right for you. To finance this build, you’ll need to know about construction loans and building loan options.
A construction loan is a short-term loan that covers only the costs of custom home building. This is different from a mortgage, and it’s considered specialty financing. When you take out a construction loan, you will make interest-only payments while the construction is being completed. Once the home is built, the owner must apply for a mortgage to pay for the completed home.
The 2022 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single-family house is around 9.6 months— from start to finish — to build a new home. But that timeline increases to 12 months when owners act as their own contractors and length of time also varies per region in the U.S. When you’re building a house from scratch, you must consider many variables. Part of the fun of new construction is that you get to customize your space, but customizations can take more time, especially if your contractor has to special-order materials. Get started working with Core Bank this fall so that you could possibly move into your home this summer.
Benefits with Working with Core Bank
Core Bank’s construction and building loan options can help you so that you don’t need to wait on building your dream home.
- $1,500 credit towards permanent mortgage closing costs
- 1/8% discount off your permanent mortgage rate
- Extended permanent mortgage rate locks available with up front deposit, refunded at closing
- Fast permanent mortgage and construction loan pre-approval
- No lender cost permanent mortgage refinance
What Are the Requirements for a Construction Loan?
- Completed application and verification documents, including lot contract
- Construction contract with an established home builder
- Mortgage pre-qualification letter from your mortgage lender in the same amount you wish to request a construction loan
With the right construction and lot loan, you’ll be able to cover the cost of the land, contractor labor, building materials, and permits, as well as contingency costs that come up during construction. Let Core Bank walk you through understanding how different personal building loans work, different interest rates and loan requirements. Contact someone from our mortgage team today!
Lender Costs (i.e., Administration, applications, closing commitment, processing, underwriting and wire fees) will be waived when borrower closes on permanent refinance. All other 3rd party fees will apply to the permanent refinanced loan. Loans are subject to credit and property approval. Additional terms and conditions may apply. Loan programs are subject to change without notice.