Choosing the Right Lender

Choosing the right lender requires the prospective borrower to do some research. This guide will help you identify the traits of a good construction lender and put you on the path to understanding why you should use us for your construction financing needs.
Questions to ask prospective lenders:

Question their commitment to Construction Lending

Are you a mortgage broker or do you work for a direct lender? Mortgage brokers often have far less hands-on control when it comes to construction financing. Since they do not work for the bank that's financing the build, brokers cannot assist during the course of construction as effectively as direct lender officers can - this is a critical to a seamless draw process. We are a Top-10 Direct Portfolio Lender.

Does the loan representative have ample experience in construction lending? Your loan officer needs to be an expert and counselor from breaking ground all the way through the permanent financing stages. Having a point of contact that can essentially walk you through the process from start to finish will make for a less stressful experience. Your loan officer should be involved and available during construction should any unexpected issues arise. Our loan officers are trained extensively on our CP products and the construction lending process as a whole. We pride ourselves on being the experts on construction lending.

Is construction lending something your company has a major focus on? Some lending institutions offer construction lending programs but do not choose to devote focus to it, while others make it a mainstay. The construction loan has a broad range of lender processes that take place both center-stage and behind the scenes. We are currently ranked one of the top three residential lenders in Construction Lending volume YTD. This high level of success is an obvious indication of our primary focus.

Research their Reputation

Do they close loans on time? Are their estimates of closing costs accurate? Do they manage the draw process in an accurate and timely manor? These are some of the many questions you need to address prior to choosing a construction lender.

Research their Product Menu

Do you determine loan to value using sales price or appraised value? This important factor will dictate your minimum required cash-to-close amount, relative to your down payment, closing costs, etc. We use appraised value, helping minimize the cash requirements at closing.

Do you allow the interest payments during construction to be financed? If you're concerned with making two mortgage payments, this is critical. Our "Interest Reserve Program" allows for this possibility. ( Not allowed on 2nd Homes or Investment Property )

Do you have a conversion option? Having the option to change program types at modification leaves room for unexpected changes. Our choices for changing the permanent loan type are extensive - and don't cost a penny to do so.

What happens if my builder's costs to build my home exceed the original estimate? We will allow for a one-time construction account increase should the funds to build be depleted before the home furnished. Most lenders have one option should that occur: finish the home with your own personal funds. We can also increase the construction account* should you have paid out of pocket for any upgrades during construction - and reimburse those funds to you in cash.

What happens if we decide to make additions to the home plans after the initial closing? When you build a home you want it just right - sometimes that may mean you want to make changes during the course of construction. Should any changes require additional funds, We can increase the construction account* to accommodate you.

Do you have an end loan product that's ideal for my financial and personal needs, as well as my goals for the home? If payment is of primary importance, and/or you plan on owning the new home less than 10 years, consider short-term interest-only ARM's. If long-term stability is the key, a fixed rate program might suit you better. Our end loans range from a 3yr Interest-Only ARM up to a fully amortized principle and interest 30yr Fixed - and everything in between.

* Subject to approval and qualification