Get Construction Loan Center and Get Housing
Construction loan center is now gaining traction among individuals all over the world. 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, prior to joining the bandwagon and get a loan, it is vitally important that you have thorough understanding of the loan.
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 the lenders are going to secure first a mortgage over real estate property that you will be financing; then they are going to plan a periodic payment to the builder or house developer at periodic interval. All of this while the work is in progress.
The construction loan center has various requirements and credit policies that they are adopting 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 will be funding the amount of loan required by the client to be able to cover the entire cost of buying vacant land as well as the cost of building the property.
Number 2. Just before the beginning of the construction and if it happened that you have borrowed the vacant land already where you will be building your new house, the first loan disbursement that has been made by the construction loan center will pay off the vacant land first.
Number 3. Providers will be breaking down the amount of loan into progress payment drawdown amount. This will be made to the builder at completion of every stage of construction.
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 will be done at every construction stage from buying of vacant land, laying of flooring, installation of roofing including the frames, lock up stage and lastly, the completion stage.