Home construction loans could be an excellent option for would-be homeowners to access features that may be hard to come by on the open market, like a custom garage or a second kitchen in the basement for your catering business. A construction loan also could be an excellent option when inventory is low in the market you’re looking to move to.
Most home construction borrowers are not planning to do the construction themselves, but instead they will likely contract a builder to construct their new home. Here are a few tips from The Federal Savings Bank, a nationwide construction lender, for working with your builder on your new home.
Signs of a Quality Builder
Be judicious when selecting your builder and be sure to solicit multiple bids for the project. Take the time to select a builder who is known for their higher quality/standards rather than the cheapest. After all, you’ll want to stick with them for the whole building process.
Keylifehomes.com wisely advises you to find a builder who can ”manage the project […] It’s the builder’s responsibility to make sure that the right people in the right numbers are on-site at the right times and that they have the necessary materials to do their work.” A construction lender like The Federal Savings Bank will want to trust your builder too – so they will ask for items like plans, licensure, and a budget when you apply for a home construction loan.
One advantage The Federal Savings Bank has over many competitors is that it keeps the construction loan process “in-house,” meaning that instead of sending off your loan to a third-party servicer while your home gets built, a representative from The Federal Savings Bank will instead be available to monitor your project and assist as needed with the same ease as the application and approval process. If you opt for a “single-close” construction loan, your home loan will automatically convert to a standard home loan at the end of the build period, meaning you can keep your focus on the many other demands of the home construction process.
Other Resources for Home Construction and Home Construction Lending
If you are working with a builder for the first time, or the first time in a while, there’s a lot to learn. Fortunately, The Federal Savings Bank offers a collection of online resources for potential construction borrowers. Explore our breakdown of the construction loan process, articles about low-cost construction loans backed by the Department of Veterans Affairs, or jumbo construction loans for high-value properties. Whatever your situation, you may have a lot to gain from a call with a loan officer from The Federal Savings Bank. Get in touch today at no cost!
Subject to credit approval. Terms and conditions may apply. Subject to VA eligibility requirements. Property insurance is required on all loans secured by property.
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information on financial planning or investment advice, consult a registered investment advisor or financial planner. For tax advice, please consult a tax professional.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
