At California Mortgage Advisors Inc., we understand that for many people, a home construction loan represents more than just the chance to build a home to their specifications. In reality, it represents the chance to build a dream. We want to help you build that dream. However, we also want to make sure you are fully aware of the qualification process and understand all of your options.
California Mortgage Advisors Inc. has been proudly serving customers with loans tailored to fit their needs for over 20 years. When consumers are interested in building their own custom home, they have faith that CMA will do whatever it takes to connect them with the funds necessary to break ground on their dreams. For any questions about your custom home construction loan feel free to contact a Mortgage Advisor at (800) 927-6560.
What is a Construction Loan?
Construction loans are short-term loans, usually a year or less, used to pay for the remodel or new construction of a home. The sole purpose of a construction loan is to get the homeowner through the construction period with a temporary loan. After the home is completed, the property owner will obtain a permanent loan or take-out loan with more traditional terms. CMA offers both types of loans in a streamlined process designed for convenience and simplicity.
How Does a Construction Loan Work?
After the qualification and approval process have been completed, the lender begins making loan disbursements to the contractors or sub-contractors. However, to protect both parties, funds are not disbursed all at once. Disbursement dates, often referred to as draws, coincide with the completion of building milestones. These milestones can be anything from pouring of a foundation to plumbing installation. Specific draw dates are based on the predetermined milestones set by the lender.
Qualifying for a Construction Loan
CMA Mortgage Advisors are available to walk you through every step of your personalized construction loan qualification process. However, we can also give you a general overview of what will be required.
1. Every project needs a qualified builder. In most instances, this is a licensed general contractor with a history of quality work. At CMA, we want you to pick someone who you feel comfortable with and whose work you appreciate. However, we also want to make sure you remain happy and satisfied throughout the process. Ultimately, we want you to select a general contractor who you are happy with as well as who is approved with the lender.
2. You will need a detailed plan. A detailed plan ensures that you can receive the exact loan amount that you need to complete your dream home. Your builder will help you create this plan and make sure it is organized to industry standards prior to submission.
3. Just like a more traditional loan, construction loans require an appraisal. Since the complete home doesn’t exist, the appraisal will be done assuming the construction is completed according to plans. The appraisal ensures that borrower and builder expectations are in line with market realities.
4. A down payment or equity in the transaction is almost always required for construction loans. Your Mortgage Advisor will work with you to ensure that you meet the lending requirements for the construction lenders and also make sure the take-out loan will work for the property and your credit profile.
We Want to Help
Whether you are currently brainstorming your dream home or are ready to break ground tomorrow, CMA can help you with your home construction loan. At California Mortgage Advisors Inc., we genuinely believe that we offer our customers the best mortgages in the industry. We have offered a variety of loans since 1993, which means our Mortgage Advisors have successfully matched tens of thousands of borrowers with loans tailored to meet their needs and unique financial situations. Our Mortgage Advisors are available at (800) 927-6560 to answer your questions.