Camerata Homes: About New Construction Loans

 

“Purchasing or refinancing your home is perhaps the largest financial decision you will ever make. With such an important decision at stake, it's imperative that you have trust in the individual and institution conducting your transaction. Thank you for entrusting us.”

-- Tom Furjanic

 

Constructions Loans differ from regular mortgages or refinance home mortgages in the way the loan amount is calculated and the way it is structured.

To calculate the loan amount, we begin by identifying the basic budget. The main components of construction loans included in the budget are:

• Soft costs (architectural plans, engineering and permit fees).

• Hard costs (all the actual physical costs of construction).

• Closing costs (origination and lender fees, title fees, and closing fees).

• Inspection fees.

• Reserves (interest reserve and contingency reserve).

• Existing lot pay off.

Regular purchase money or refinance mortgages are based on Loan to Value Ratio (LTV),  whereas construction loans are based on LTV as well as Loan to Cost Ratio. Furthermore, in a normal mortgage, the closing costs are added after calculating the Loan to Value, whereas a construction loan usually includes the closing costs.

Construction Loans can be complicated by the fact that each investor/lender calculates the numbers differently. We do our homework from the very beginning in order to avoid any "last minute" unpleasant surprises.

Our team's familiarity with the guidelines of construction loans offered by most major institutions makes it possible for us to help you choose the program that best suits you and your project. In fact, since we work with approved brokers, the cost of the loan to you is generally better than if you had applied directly.

Residential construction loans are a specialized field. We will work with you from the very beginning until the final closing, making the process smooth and seamless.

 

For more resources including mortgage calculators, rates, and applications, please visit  http://www.iloandenver.com/