Over the years our firm has worked with hundreds of lenders. Lenders often have similar requirements, but lenders also tend to specialize in different types of loans, and our team is familiar with the variety of loan types and the options that might be most beneficial for you. Therefore, we recommend that we visit with you prior to your formal application for funding. We can help you identify the right kind of loan for your situation, and also provide you with the necessary paperwork that the lender is likely going to require in order to receive approval.
Many financial institutions do not offer loans for new construction projects. We keep a list of local banks, credit unions, or other lenders willing to providing funding for new construction.
Your lender will look at your credit history and your credit score. What they find can impact both whether or not you are approved for a loan and can also affect your loan terms and interest rate. It is best to check your own credit prior to your application and make sure that any issues that are negatively affecting your credit are resolved.
In addition to looking at your credit score, your lender will ask you for documentation regarding your current financial standing. This may include documentation of your budget and ongoing expenses, as well as money or investments that can satisfy their need to evaluate your credit worthiness and terms.
Lenders may follow similar guidelines, but they are also in competition with one another. Once you have gathered the necessary documents to illustrate your financial health, lenders will be able to begin communicating the amounts you can borrow, and the rates and conditions of the financing. Be aware that custom building projects require two types of loans: one for funding the construction process and then you will usually shift that loan into a standard mortgage. There are several options to consider, including a construction-to-permanent loan.
In order to get a construction loan your lender will want to see that you have property ready for the construction. We have experience in purchasing land, and can help you make informed decisions if you invite us to help you through this process. Our team includes experts in helping you secure lending, real estate agents, and other industry experts that can help you identify and prepare the land, select an architect, and have a plan ready for the lender to review
Of course, lenders require that you have formal plans and paperwork before they are willing to fund a new building project. We will work with you to put together a blueprint and outline a budget and schedule. We will help you put together documents that provide all the relevant details. The more specific your plan, the better your chances of getting properly funded with good terms. Our involvement can actually help you get better terms. The lender will look closely at your plans and financial history, but they will also examine our work history, our insurance, and check our references. When they see how thorough GIS is in our preparations and planning, they will be able to provide you with the funding at terms that are advantageous for you.
Once we have completed all of these initial preparatory steps, we will help you apply for your construction loan. Your lending institution will conduct a formal review of your plans, your credit history, and evaluate the proposed construction project to determine if it is something that they are willing to fund. Depending on the loan offer you receive, you can choose to accept the loan or take your proposed project to another lender to see if you can get better terms.
Construction loans are specifically to fund the construction of a building. Once the building is complete, your construction loan will likely be due. Usually our clients will transition from a construction loan to a standard mortgage. Many lenders that provide construction loans also have the option to roll your construction loan into a mortgage loan – whether the mortgage is FHA, VA, or a conventional mortgage. The advantage of using this kind of loan is that you only have to pay closing costs once.
Once you construction loan is funded, you will be able to make draws on the loan in order to pay for the building project. Your lender may send officials out to inspect the project, or they may require reports regarding the progress of the project. Our detailed and itemized financial reports are perfect for keeping your lender in the know regarding your project. Most construction loans only require that you pay interest on the amount withdrawn on the account each month rather than requiring you to pay interest on the entire loan amount
If you are considering developing a site in the Seattle area and would like the opinion of an experienced professional, click the “Free Site Visit” button and we will schedule a time to meet with you.