Are you ready to Build?
Deciding to build your dream home is a big decision. At Vision Bank, we know how exciting and stressful the process can be. That is why we make the loan process as simple as possible, so you can focus your energy on important things like figuring out tile, brick, cabinets and more.
Choose a Loan Type and Apply
Construction Loan Checklist
- Full set of construction plans and bids from home builders
- Description of materials signed by Contractor and Applicant
- Signed contract between Contractor and Applicant
- Purchase Agreement for land or Warranty Deed if land is previously owned. If purchased in the last year, verification of purchase price is required
Close on Construction Loan
Closing will take place at a Title Company’s office or with a Vision Bank MLO. Don’t forget to bring a check for any down payment and/or closing costs. When you arrive, you will begin signing various documents including the Closing Disclosure, Promissory Note, and Mortgage. After all the documents are signed and completed you may then begin building the home of your dreams.
Following the closing of the Construction Loan, you have 12 months to complete your home. You will receive draw requests from your builder. You will submit a signed Construction Advance Form for funds to be transferred to your Construction Checking. Evidence of Builder risk insurance will be required. Regular construction inspections will be conducted during this process to ensure the amount advanced corresponds with the construction progress. You will receive monthly payment notices to reflect the interest amount due. Interest is calculated on the amount of funds advanced.
FAQs About Construction Loans
What kind of loan is best for building a home?
A construction loan provides short-term financing for the costs associated with building a new home. The option to make interest-only payments also makes it more affordable. Once your home is move-in-ready, you can convert your construction loan to a conventional mortgage.
Is a Construction Loan harder to get than a mortgage?
Qualifying for a construction loan may require a larger down payment and more paperwork than a typical mortgage. Construction loans may also carry a higher interest rate as it’s a riskier form of financing than a mortgage on a finished home. If you have questions about your eligibility for a construction loan, just reach out to our mortgage lenders and we’ll be happy to help.
Can you use a construction loan to purchase land to build on?
When building a home, you may already own the land to build on or you may need to purchase a land lot. Construction loans have some flexibility, so talk to our mortgage lenders if you’re looking for a land loan as well.
Is it cheaper to buy or build a house?
The answer depends on your local real estate market and what you’re looking for in a home. Buyers looking for more space or unique features may find it cheaper to build their dream home then try to find it on the market.