Construction Loans

Attorneys Funding Group’s construction loan programs are generally recognized as the best-in-class in the business when it comes to construction finance. You can be confident in our programs since they’ve been tried and proven by hundreds of happy home builders in communities all across California.

 

You can be certain that your construction financing will be done properly thanks to our various financing choices and experienced lenders. Your lender will work with you to find the most appropriate financing solution for your needs.

 

Consider building a brand new home!

 

There are many benefits to building a new house rather than purchasing an existing one. Whether you’ve already bought property or are searching for the ideal location to build, a brand new house may provide several advantages, including the ability to customize your floor plan, design features, and improvements to meet your needs. New construction is as close to move-in ready as it gets, making it a breeze to settle in.

 

Because each new home project is unique, speaking with one of our experts is an excellent approach to weigh your choices and learn more.

 

How Does It Work?

 

A construction loan is a short-term loan (typically about a year) used to finance the building of your house from start to finish. When your house is finished, your construction loan easily transitions to a permanent mortgage with an Attorneys Funding Group construction loan. You only pay interest on your loan during construction, and your payments may be tax-deductible. You’ll save money and time with only one up front closure and one set of closing fees. Please contact us for construction loan rates.

 

One-Step Construction Loans

 

With Attorney Funding Group’s One-Step Construction loan program, you can build a new house or undertake a major renovation. You can combine all of the expenses involved with building, land acquisition, and mortgage into one loan with this unique loan. If you’ve always wanted to build your own house from the ground up, this financing program will help make your dreams a reality.

 

Features of a One-Step Construction loan include:

 

• To minimize interest rate risk and volatility, you’ll be able to lock in your rate before construction starts.
• The cost of land may be rolled into the loan.
• You may be able to use float-down options to take advantage of cheaper interest rates if they fall throughout the construction phase.
• Allows you to finish construction in up to a year with a fixed interest rate, even if rates rise!
• You’ll have peace of mind knowing that you’ll just have to deal with one loan approval procedure, one closing, and one appraisal before construction even starts.

 

Understanding a Construction Loan

 

Many people are unaware that getting financing for new construction needs two loans: a construction loan and a mortgage for the finished home. A construction loan is a short-term, temporary loan used to build a new home, and after the building is finished, permanent financing is arranged (i.e., a 30-year fixed loan at x percent ).

 

The origination fee, appraisal, title work, and other closing expenses are doubled when you have two loans. However, since part of the work was completed with the first construction loan, we decrease some of those costs on the permanent loan.

 

The origination cost, for example, is 50% of the usual price the second time around. In addition, if the project is completed within 12 months of the start date, we may not need to conduct a full appraisal and may instead offer a completion certification at a lower cost. Borrowers benefit from these features since they make the procedure a bit simpler.

 

Construction loans have different down payment requirements than other types of house loans. For example, on a construction loan, we usually lend up to 80% of the assessed value, while on a purchase of an existing house, we may lend up to 100% on certain loan types.

 

Some borrowers may find it difficult to make a down payment on a construction loan unless they have equity in the property they are constructing on or cash on hand. They can also save money by constructing the home themselves and accumulating “sweat” equity.

 

How to Know If You’re a Good Candidate for a Loan

 

The most important factors we consider when you apply for a loan are your credit and debt-to-income ratio. It also helps if you have money set up since you’ll almost certainly have to invest some of your own money into the project.

 

If a borrower was given the land or purchased it many years ago and paid it off or down significantly to create equity, it simplifies things. Instead of cash, this may be used as a down payment. However, remember that changing jobs or making significant financial changes like starting a business while the house is being built is not a smart idea since this may create issues with the final financing.

 

If you believe you’re in decent condition after reading this, you can start looking for a loan!