The Ultimate Guide to Construction Loans 2024

Ultimate Guide to Construction Loans 2024  Boerner Construction

Ultimate Guide to Construction Loans 2024 | Boerner Construction personal loans and home equity lines of credit that provide funds in one lump sum, construction loans disburse the money to borrowers in stages called “draws.” Each draw coincides with a major milestone in construction, like when foundation work begins or the framing process gets underway. The borrower is typically only obligated to pay interest on the funds drawn, until the construction is completed and the loan transitions into a permanent mortgage.

Building Dreams: The Ultimate 2024 Guide to Construction Loans with Boerner Construction

In order to qualify for a construction loan, borrowers must have a high enough credit score, sufficient savings for a down payment and a solid financial history. Lenders will also look at the property’s location, size and value to determine if it is eligible for financing. In addition to a detailed construction budget, lenders will request the borrower to submit a personal financial statement and recent employment information to get a better idea of their overall financial picture.

Most construction loan lenders require a 20% down payment, but there are some that offer more flexible requirements. Look for lenders that offer single-close construction loans and a variety of interest rate options, including an adjustable-rate interest-only loan during the 12-month construction period and a fixed-rate 30-year mortgage once construction is complete.

Some lenders, such as TD Bank, offer both single-close and multi-close construction loans and have flexible down payment requirements. It is important to find a lender that services your area and has robust customer support. Additionally, be sure to select a lender that offers flexible credit score minimums as well, since it is not uncommon for borrowers with less-than-perfect credit to qualify for a construction loan.