Get Construction Loan Center and Get Housing
Construction loan center is now gaining traction among individuals all over the world. It is going to be a smart idea to take time learning about this structure especially if you want to build a house and currently in need of financial help. On the other hand, it will be very important that you have good understanding of what the loan is about just before you jump to the bandwagon and apply to get one.
So what’s with a construction loan offered by construction loan center? Well, it is basically a short term, interim loan used to finance the construction cost of your dream house. 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. And everything is happening while the work is in progress.
Construction loan center has different requirements and credit policies that they apply when processing the loan application. Majority of them on the other hand are basically the same. Following is a quick list of credit providers or lenders fund construction loans.
Number 1. To be able to cover for the cost of buying vacant land and building the property at the same time, these said entities are going to fund the amount of loan that the client needs.
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. At the completion of every stage of construction, this would be made to the builder.
While construction loan is nearly the same with the traditional mortgage that you know, it has a number of differences similar to the fact that the interest is calculated against the portion of the money borrowed and been drawn down, it is usually a short term solution with a max of 12 months, the construction of the house has to be done within the same year of first progress down payment, the construction of new house should commence within 1 year of loan settlement and the borrowers are expected to pay the interest during the period of construction.
The construction loan center will be arranging everything to prepare valuations prior to progressing payments made 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.