Preparing for Home Construction Financing
Since a construction loan involves determining the value of something not yet built, you’ll be asked to provide some basic information to assist in determining the future value of your home.
- At what price range are you looking?
- What is your down payment?
- How much did the land cost? When did you purchase it? Have you done any improvements, and what is it worth today?
In addition to the standard credit documentation, there are a few more documents needed to obtain an appraisal:
- Final plans, plot map and specifications
- Purchase contract for the lot or settlement statement if you already own the land
- Description of materials from the builder
- Cost breakdown from the builder
- Construction contract between you and the builder
Budgeting for the building process
Funds from the construction loan are disbursed monthly, based on your draw request, and verified by our inspector. We recommend that the cost breakdown include a line item for contingencies since it is not unusual to exceed some of the estimated costs. If there are cost overruns, these funds need to come from the contingency line or from your own funds.
Building a home can sometimes seem overwhelming, but we’ll be there for you every step of the way. Schedule an appointment, so we can help answer your questions and help you get started.