custom home financing
Your custom home is an investment, and we respect the time, money, and thought you put into this task. As part of our turnkey service, we can help you negotiate the complicated array of financing options available to you. A construction loan can only close if you have architectural plans, a signed contract, and a cost breakdown from a builder.
construction-only loans
These loans pay for the acquisition of the land and the construction of the home. You will need to secure a permanent mortgage from another lender to replace and pay off the construction loan once the construction is finished.
construction-to-perm loan
These loans pay for the acquisition of the land and the construction of the home and then automatically roll into a permanent mortgage at the completion of the home construction. The interest for the permanent mortgage is determined when the loan is set up. We usually recommend our client opt for this type of loan since the mortgage’s interest rate cannot go up during the construction period. During this period, interest will be charged only on the funds that have been disbursed. When the construction is completed, the permanent loan period begins. One benefit of a Construction to Permanent Loan is you can lock in the permanent rate at closing, and have up to 12 months to complete your new home construction. There are many available permanent mortgage programs, including 30-¬‐year fixed and an Adjustable Rate option. The required down payment will vary by bank and the program. For more information on loans, please feel free to contact one of our preferred loan officers today.
equity or down payment
You will most likely need to have a minimum down payment of 20% cash and/or equity to qualify for a loan. Of course, the world of mortgage lending is an ever-¬‐changing one. Several local banks can look at your financial situation and determine if you would qualify for a program requiring a lower down payment.
construction draws
Upon completion of a designated stage of work specified in the construction loan agreement, the contractor will submit a draw request to the lender for review and approval. The lender will then disburse funds for that phase of work that has been completed by the builder and verified by the bank inspector. The lender will require the Owner to approve the draw prior to disbursement. Santa FE Homes has a 10 Draw Schedule that is customized to fit most custom home projects
construction term
Most custom homes typically take 12 to 18 months to build, depending on the complexity and size. We advise all our clients to secure an 18-¬‐month construction loan just in case we run into unexpected delays.
