Permanent funding is not all you need to get a construction loan, you also have to show the lender that you are going to be able to build a house, not half a house. You will need your plans and estimations, and everything set before you go in. You want to impress the lender with your completeness, so go prepared and make a good first impression. This will help you get the loan.

Go to your construction lender with your plans, specifications, a cost breakdown with materials and labor bids and quotes, and a proposed schedule or activity and completion.

Your lender will want to know what it is going to cost to build your home. They are going to need a cost breakdown from you. Most lenders have a specific cost breakdown sheet that you will need to fill out. Next, your lender is going to require an appraisal of the plans and specs, and the comparable sales in the area you are building in. This will tell them what they want to know.

Your lender may also want to know some personal information about you and your financial situation. They will probably want to see verification of employment, bank statements, and a credit report. The credit report they will request, the other items you will need to supply, so come prepared with financial statements for at least 3 months back, and some sort of employment verification.

New Home Construction Loan Disbursement Timing

Construction loans are disbursed as the work on the home progresses. You get your money in draws along the way, so do not expect it all at one time. Every lender is a little different, but you will usually get five or six standard draws built into a construction loan, if additional draws are required you would have to pay extra. It costs extra because it requires additional inspections, which cost money. So, try to stick to the draws allotted, or you will be spending more money.

You can have the draws made directly to you, or if you are using a builder, they can be made to him or her. You get to decide who you want draws made to. It is a good idea to have them made to you, that way if you have any issues with your builder you can withhold payment until work is how you want it. Regardless of who the draws are made to, the final draw goes to you! You then endorse the check over to whomever it needs to go to once you are satisfied that the home is complete, and everything that was supposed to be done is done.