Below are some of our sample options for construction loans. Not seeing what you need? Call or Email us!
You are buying or already own the subject lot free and clear OR have a collateral lot of equal value (note: closing the purchase of the subject lot at the same time of our closing on the construction loan is ok).
You own or are purchasing a lot and the current 1st mortgage lender or seller subordinates to 2nd position if in favor of this loan (note: our loan is in 1st mortgage position, seller/current lender carries balance of what is owed in 2nd mortgage position).
You are doing a lot purchase + construction loan and need financing for both. (note: this requires 20% down payment based on the total of the lot purchase and all construction costs).
OVERVIEW of CONSTRUCTION PROGRAM and OPTIONS: On all three options above we will loan 100% of your construction costs, plus closing costs and payment reserves. Here is a big difference… on Options 1 and 2, We use a front loaded construction draw method, where we GIVE YOU AN INITIAL DRAW AT CLOSING. Typically draw 1 is for: permits paid to the city/county, excavation, and foundation. Once you are at the point of foundation, we give you another up front draw for the upcoming expenses (of framing and trusses for example). On Option 3 NO INITIAL DRAW IS GIVEN, so we will commit to 100% funding of your project, but all construction funds are held for draws, meaning you must pay for everything out of pocket as you go and all draws are done on a reimbursement system (you pay then we reimburse you).
DRAWS: On all options we set aside funds for the remaining construction at closing according to the draw schedule you provide. The funds are disbursed back to you when certain progress marks are made. When needed you would request a draw by calling or emailing Expert Mortgage Group, then you turn in your expenses (on a spreadsheet is preferred) with invoices or receipts for subs as needed, along with lien waivers as necessary, then we come and inspect your progress and give you another draw within 2 to 4 days. The draw process is pretty easy and fast if good records are kept on the builders side.
COSTS: The closing costs and loan fee are added in to the loan. The loan fee/points vary by project and borrower experience level. (note: the loan fee decreases the more construction loans you successfully do).
PAYMENT RESERVE: We also usually figure in the first 4 to 5 months of interest into the loan so you don't have to worry about the payment while you build. After the first four to five months you are responsible to make the payment. (note: this is optional and not required).
TERM, RATE, and PAYMENTS: The typical construction term is 12 months, the interest rate will be 11-13%, and the payments are interest only.
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