Get Construction Loan Center and Get Housing
Construction loan center is actually gaining popularity and attention amongst people. If you too are seeking to build the house of your dream especially when in need of financial assistance, then it would be wise to take advantage of this scheme. On the other hand, it will be very important that you have good understanding of what the loan is about just before you jump to the bandwagon and apply to get one.
With this in mind, what is a construction loan that you can get from a construction loan center? Well as s matter of fact, this is a short term, interim loan that is being used to fund the cost of construction for your dream home. The credit providers or lenders will be securing a mortgage over real estate property that you’re financing and they’ll be creating periodic payments to your builder or house developer at periodic interval. This is while the work is still in progress.
Construction loan center has different requirements and credit policies that they apply when processing the loan application. But don’t be so confused immediately since most are the same. In the next line is a list of credit providers or lenders funding the construction loan.
Number 1. These entities are going to fund the amount of the loan needed by the client in order to cover for the entire cost of buying the vacant land and the cost of building the property.
Number 2. Prior to the start of construction and if you have borrowed money to buy the vacant land to which you will be building your new house, the first loan disbursement that is made by the construction loan center will pay off the vacant land first.
Number 3. The providers are going to breakdown the amount of loan into progress payment drawdown amounts. At the completion of every stage of construction, this would be made to the builder.
While the construction loan is almost the same with conventional mortgage, it comes with several differences like the fact that it is usually a short term solution with a max of 12 months, the borrowers are expected to pay the interest during the period of construction, the interest is calculated against the portion of the money borrowed and been drawn down, the construction of new house should commence within 1 year of loan settlement and the construction of the house has to be done within the same year of first progress down payment.
The construction loan center are going to arrange everything to prepare valuations before progressing payments to the builder. This would be done at every stage of the construction.