To build a house the way you want to, you'll need a construction loan.
We can help you get Prequalified
What are Construction Loans?
A construction loan is a short-term
loan used to finance the cost of building a house or real estate
project. The length is reflective of the time needed to build the house,
which is usually between six months to a year.
What does it take to Qualify
To be qualified for a construction loan, most lenders require a 20-25% down payment. Interest rates are higher because of a term called “prime-plus”. This is because funds are not secured by a completed home and are released as prearranged milestones.
Conventional And FHA Construction Loans
Conventional Construction Loans:
- Credit score of 680
Income requirements, such as - debt-to-income ratio of 45%
- Down payment of 20-25%
- Detailed plan of construction project
Builder for the project
FHA Construction Loans:
- Credit score of 640 or higher
- 620 with 10% down payment
- Debt-to-income ratio below 43%
- Down payment of at least 5% (10% if below 620)
- Cannot exceed FHA loan limits
Types of Construction Loans
Construction to Permanent
Construction-to-Permanent loans cover not only the construction period but are then converted to the traditional mortgage. Homebuyers make interest only payments. Since this type of loan rolls into a conventional mortgage, buyers will only pay one set of closing costs.
Construction Only
Construction-only loans, as the name implies, funds only the build of the house. It does not roll into the mortgage. Qualifying standards are more difficult, and interest rates are likely to be higher than traditional loans due to the prime-plus interest rate, since there is a higher level of risk.
The Starboard Way!
Discovery
Let’s discus what you’re wanting and by when.
Pre-Approval
Let’s review your credit, income, and assets to determine payment and down payment amounts.
Starboard Financial
“It’s about relationships and creating easy transactions!”
Mark Blodgett - Owner
“It’s about relationships and creating easy transactions!”
Mark Blodgett - Owner
“It’s about relationships and creating easy transactions!”
Mark Blodgett - Owner
info@starboardfinancial.com 4145 E Baseline Rd, Gilbert, AZ 85234 | NMLS# 156931 NMLS Consumer Access
© 2021 Starboard Financial Management, LLC – Mortgage Made Easy
© 2021 Starboard Financial Management LLC – Mortgage Made Easy
