|
Ready to Build?If you have been dreaming of building a new house or maybe even a camp that will give you a relaxing escape in the warmer months, you might have spent lots of time thinking about what it will look like and where it will be. But how much time have you spent thinking about financing your project? With a little bit of planning and a partnership with the right lender, you can get approved for a construction loan that will take you from daydreaming to breaking ground. What is a construction loan?A construction loan is a short-term loan that funds the building of a new home, camp, or other real estate projects such as an investment property, manufactured home, or condominium. You can even use a construction loan for certain types of energy upgrades. During the construction phase, you can typically expect to make low-interest payments only to help you keep costs low. After the construction project, the loan converts to a fixed-rate loan with a variety of terms available. How do I know what my financing options are?Firstly, it is important to work with an experienced local lender who can help you determine the best options for you. But before you look for different kinds of loans, you can start your journey toward building your dream home by using an online calculator to help determine what you can afford. The online calculator can help you take a step back and see how financially fit your project is. It will ask you for the highest monthly payment you can afford and break down what is included in that payment such as local property tax, insurance costs, down payment, interest rate, and other details. From there, your lender can help you consider different options for financing a construction project, including combining a construction project budget into your home loan. You can also refinance your home loan based on the appraised value after updates to pay for renovations. How can I boost my chances of getting approved for a construction loan?The two most important factors for any loan are 1) the ability to repay the loan and 2) your payment history. This means that your lender will look closely at your credit history and debt-to-income ratio. If needed, they can often help you create a plan for repairing and building credit to be strong enough to get approved for a construction loan. What does the application process include?At Katahdin Trust, customers only need to fill out one application with one closing. The application will gather lots of detailed information about your finances to best determine loan approval, including complete plans for the project and a list of contractors and subcontractors. The application process at Katahdin Trust is made easy when you work with experienced local lenders who understand how important your project is. That's why the time from submitting your application to learning if you are approved typically takes less than a week. All loans are subject to credit approval. Member FDIC. Equal Housing Lender. Property insurance is required. |
Chat with Us