LOAN PRODUCTS
New Construction Loans
Construction loans are not the only thing we do, but we can say we specialize in them. This loan is most popular amongst our referral partners and customers because not all banks, credit unions, and mortgage companies have construction money available to lend. Or the terms they have are not flexible enough to serve a large number of customers in way that suits their goals.
Below is the typical life cycle of a construction loan and some essential points to know so that your loan process is successful and stress-free
- 9 – 12 month loan term is typical (> 12 months available if jumbo property / loan amount)
- Average 7–8 Draws Per Build (average 1 per month)
- Draw SLA is within one week after request is received.
- Construction Loans are Interest Only payments during the build phase.
- Interest is paid typically only on what amount of money you have borrowed, or what is disbursed. Therefore, your monthly payment will change over the term of the loan as you borrow more money to complete your project.
CONSTRUCTION LIFECYCLE TIMELINE
Buyer receives pre-approval* Borrower completes loan application with New Home Lending Company (NHLC), or with a Loan Officer at another lending institution, and receives pre- approval for the permanent loan. This is done first because you need to know if you qualify for the permanent financing that pays off the construction loan
Buyer identifies builder and homesite Permits can be applied for if land is already in your name. You cannot get permits if you’re not on Title. Cost breakdown and builder contract are reviewed to make sure expected budget is within the permanent loan parameters and payment goals.
Permanent loan approval is determined by NHLC, or referring Loan Officer Appraisal is typically ordered at this point.
Construction loan application is received by NHLC (TRID) E-consent is requested; Loan Estimate is sent. 7 day waiting period begins.
NHLC underwrites the construction loan and submits file to investor for review and approval Factors include: land feasibility, qualified builder, borrowers credit, value, clear title, or other loan characteristics.
Construction Processor assigned Borrowers are contacted and provided UW Loan Commitment. Borrowers intent to proceed with construction loan is identified here. If yes, any pre-closing conditions are communicated and acquired.
Site inspection with borrowers Initial site inspection with Property Inspector to confirm property is suited for build. Initial inspection checklist completed.
Appraisal received Property value confirmed and determines loan to value for project (LTV). Final UW occurs and is formally approved. Closing Disclosure is sent (3 day waiting period).
CONSTRUCTION LOAN CLOSES Documents signed. Loan is officially closed when it Funds and recording occurs.
Initial draw request #1
Draw request can be for land purchase, cost of permits required, to pay for construction loan costs, or for owner development. This excludes excavation or job site prep for stick built or manufactured home.Permits acquired Home build can begin. Copies of permits provided to NHLC office in Fircrest, WA.
Jobsite preparation begins
Initial sitework commences; soil work, compaction, footings and foundation for load bearing structure.Framing and roofing Framing and roof completed along with sheathing for siding; rough electrical and plumbing begin. HVAC installation also begins.
Insulation and windows Sheetrock hung, mudwork, windows, and external doors. Insulation installation begins.
Interior finishes Interior doors, cabinets, countertops, flooring, and appliances installed.
Landscaping Concrete work, driveway, and landscaping work are performed.
Payoff quoted – Permanent Loan Closes Payoff amount includes principal balance of loan, builders final draw, and any other fees applicable to transaction. Permanent loan is staged for closing. Once permanent loan funds and pays off construction loan the customer can move into home.
*Pre-approval is not a commitment to lend. It is based on a borrower’s current credit profile and is predicated on the condition a borrower’s financial condition, including credit score, does not change during construction.
LOAN PRODUCTS
Bridge Loan
A Bridge Loan is a short-term financing option that provides immediate cash for the purchase of a new home that is typically move-in ready. In some cases, small repairs can be included with this type of loan. We offer 6 and 12 month terms.
LOAN PRODUCTS
Renovation Loan
A Renovation Loan includes funding for acquisition or refinancing of existing mortgage to perform significant renovation, remodeling, and repairs of an existing dwelling. This can include complete tear downs to add-ons to ADU’s. These loans closely follow new construction loan parameters.
