Mar 10, 2010
Contact Info:
SureFast Mortgage Corp.
Chris A Woods
Phone: 602-734-0202
Fax: 602-734-0203
Contact Us

 CONSTRUCTION LENDING

Construction Loans and Permanent Finance for Residential Properties.

Powerful “One Time Close” program provides construction financing, Lot Purchase and Permanent loan, all wrapped in one. Why worry about re-qualifying, re-appraisals or incur additional closing costs?

Construction finance is a specialized field. To better serve your needs, we assign you an expert consultant from the moment you apply. He/She will work with you from the very beginning until the funding day, making the process smooth and seamless.

New Home Construction to Permanent Loan Program

These programs combine the construction and permanent financing of your project. You qualify for the loan once, lock in the permanent rate, sign one set of loan documents and have up to 12 - 18 months to complete your residential construction project!

During the construction period, interest is charged only on the funds that have been disbursed. When the project is completed, the permanent loan period begins.

How Does It Work?

This is a "One Time Close" new home construction loan program to finance the construction of a primary residence or a second home providing both the construction financing and permanent loan all in one closing.  This means that you sign only one set of loan documents and do not have to worry about re-qualifying, re-appraisals, additional closing costs or signing additional loan documents. 

You can lock in the permanent rate at closing, and have up to 12 - 18 months to complete your new home construction.  During the this period, interest is charged only on the funds that have been disbursed.

Unlike a purchase transaction of an existing home, New Home Construction loans involves determining the value of something that is not yet constructed! To assist the appraiser and the lender in determining the value of the home after it is built, information must provided as to:

  • What is going to be built or constructed?
  • What materials are going to be used?
  • How much will the material cost?
  • How much is the actual work going to cost?
  • How much did the land cost, what is it worth today?
  • How much will be spent on plans and permits?

You will have two more very important item to be concerned with; they are your choice of the general contractor who will be awarded the contract and the actual text of the construction contract.

From the general contractor, we will need a resume and a builder's application to be completed along with a credit check. This is for your protection as well the new home construction lenders requirement, which ensures that he/she is experienced, has a proven tract record, and will be able to perform under the terms of the contract. Each general contractor approval is good for six months. The fact that we approve a general contractor should not imply that we guarantee his/her work and/or performance.

The actual text of the new home construction loans contract is included in our application package. This is a standard contract that should be used. You should avoid using the services of a contractor who insists on using another text.

In addition to the above, we will of course need the standard income and credit documentation that is required in any real estate transaction.

Major Remodeling Loans

When a Construction Loan is used to purchase an existing property.

 If you are planning on buying an existing home with the intention of conducting a major remodel then a construction loan is the only effective way of doing that. A construction loan will not only provide enough loan to purchase but also enough to money to make the payments during construction and all the work to be done. 

The reason for that is the fact that a construction loan is based on the future value of the property, rather than the purchase price. Loan to cost limitations will apply which are outlined in the "construction loans" page.

Loan to cost ratios can be as high as 95% where the "cost" is defined as all the costs associated with:

  • Lot/existing property purchase
  • Soft cost of construction, such as architectural plans, permits fees etc.
  • Hard cost of construction which is all the actual costs associated with the physical work and labor.
  • Closing costs, such as loan fees, title fees, real estate taxes, per diem interest and last but not least closing agent fees.
  • Interest reserve, which is the reserve account that will make the payments on the construction loan during construction.
  • Contingency reserve, which is the reserve account that will pay of the unexpected cost over runs.

     

Note that unlike a purchase money mortgage loan a construction loan closing expenses are considered as a cost and are inclusive of the loan amount calculation.

The same loan can be used to completely remodel and or add on to an existing home, when the present equity is not enough to complete the project using a home equity line of credit.

Again the loan to value will be based on the future value of the property. However if you have owned the property for over a year then the loan to cost can be as high as 100%.

All repair, renovation, rehabilitation and expansion expenses including but not limited to the following list can be included in this remodeling construction loan Program :

  • Additions to existing structure.
  • Removing / Replacing doors and windows.
  • New roof.
  • Interior and exterior walls.
  • Floor coverings
  • Landscaping.
  • New Kitchen and bathrooms.

Even luxury items such as, pool, spa and tennis court are allowed. Basically everything can change down to the foundation.

 

 

Land Loans for Residential Construction

Our Lot loan program is one of our more popular products. These land loans are designed as purchase money loans for those borrowers who aren’t ready to begin construction at this time, and as such are not ready to obtain a construction loan, but will be ready in the near future.

The lot must be normal for the area and at least one utility must be available from the street.  (Septic tanks, propane tanks, are acceptable if these features are normal for the neighborhood.

 

 

Speculative Construction Loan (Spec).

Construction loans offered to professional homebuilders, contractors and developers.


Contractors, builders and developers who are building a home without a guaranteed sale upon completion are said to be building on “Spec”, which is short for “Speculation.” These individuals and companies are speculating that’s they will earn a profit when sell the newly constructed home.

 

 

 
SureFast Mortgage Corp. 4201 North 24th Street Suite 150, Phoenix, AZ 85016