If you are planning to build a new home or perform extensive rehabilitation work on an existing home, a construction loan can help you get the money you need to complete the project. However, construction loans are different from a standard mortgage. If you are interested in this type of loan, you need to work with a lender who has experience with construction loans and can help you find the solution that is best for your needs. We have the experience and resources necessary to help you move through the application process quickly and secure the funding you need.
What Is a Construction Loan?
A construction loan is a loan you can use to build a new home or possible make renovations to an existing home. In most cases, a construction loan is a short-term loan with a maximum term of approximately one year. Once your project is complete, you can apply for a traditional mortgage to replace the construction loan if necessary. Construction loans are also considered hard money loans in most cases, which means they are asset-based loans with higher interest rates than a traditional mortgage. Interest rates may also be variable over the loan’s term.
Because construction loans are so different from other types of home financing, finding an experienced lender is essential. A lender with an in-depth understanding of construction loans can simplify this process and help you get the money you need with as little difficulty as possible.
Will I Be Approved?
When applying for hard money loans like a construction loan, you must provide a variety of information about your financial situation. Some of the factors we will consider when deciding whether to approve your application include:
- The current value of your property.
- The estimated value of the home after it is complete.
- Your income.
- Your credit history.
- The income and credit history of any co-borrowers.
Our construction loans have specific requirements you must meet in order to qualify. The exact requirements will depend on the specific type of financing you request. We will discuss all of these details with you as you prepare your application. After we pre-approve you for construction financing, we may request additional documentation before finalizing the loan.
Keep in mind that a construction loan will not act as a long-term mortgage. Once your construction project is complete, you may need to secure a traditional mortgage loan.
How Much Money Can I Borrow With a Construction Loan?
Construction loans are designed to help you complete a project, whether it be a renovation or a new home. For this reason, the amount of your construction loan will be higher than the property’s current appraised value, leaving you with a loan-to-value ratio higher than 100 percent. The exact amount you can borrow depends on the specifics of your intended project and your financial situation. Contact us today to learn more.
How Quickly Can I Be Approved?
If you are ready to begin a construction project, you will want to get a loan as quickly as possible. Fortunately, our company has significant experience providing construction loans to borrowers, and we can help you move through the application and approval process quickly and efficiently. Every borrower is different, but we will do our best to get you the money you need fast so you can start working on your new home.
We are proud to offer construction loans for all types of projects. Please contact us today to learn more about construction loans or to begin the application process.