Building a home is an exciting time. From choosing your own unique finishes to choosing your plot of land, the possibilities for new construction loans are limitless.
You have so many decisions to make when it comes to what goes into your house, and many choices for financing it. At Landmark Bank, we’re here to help make the financing aspect of building a home as easy as possible, utilizing the skills of our friendly, knowledgeable team of local lenders.
When it comes to new construction loans and building a home, you can trust that Landmark Bank is here for you.
Building a home? This overview shows you exactly what to expect from the home building process, and how Landmark Bank can help finance home construction loans.
Fill Out a Construction Loan Application
You have decided building a home is for you. The first step in the home construction loans process is to apply!
Landmark Bank offers an easy online application for the convenience of applying for new construction loans at any of our banking centers.
After we receive your completed application, you’ll be asked to provide the standard credit documentation, including:
- Current pay stubs
- Bank and investment statements
You will also be asked to provide a copy of your contract with your builder, plans and specifications of your project, and cost estimate breakdown.
Once your plans have been finalized, the bank will order an appraisal. The appraisal will give an estimated value of your new home once construction is completed and is based upon the plans and specifications from your builder.
Title & Insurance
During construction, you will need to secure a construction title policy on the project. Once your construction is completed and you secure permanent financing, your fee paid for the construction policy will be applied to the final title policy.
You or your contractor must also carry a builder’s risk insurance policy while your new home is being built. Typically, any local insurance agent can write a builder’s risk policy. This policy protects you from any damage that could occur to the home during construction.
Your New Home Construction Loan’s Processing & Approval
Once all of your information from the application has been verified, your loan will be underwritten. Upon approval of your loan request, a closing date will be scheduled for your construction loan.
Construction loan interest rates are tied to the prime lending rate and will vary based on your credit scenario. Most construction loan terms are six to nine months.
At closing, you will pay closing costs. Some of the closing costs are one-time expenses that will be applied to your permanent loan upon conversion of your construction loan.
During the construction period, interest is charged only on the funds that have been disbursed. As the construction of your new home progresses, advances are made on your loan when you or your builder submit a written disbursement request, accompanied by receipts for project expenses.
To protect you and your property, each disbursement check will include a lien waiver on the back. Once the check is cashed, the payee agrees that payment for the materials or services is acknowledged. It is very important to secure lien waivers from all suppliers and sub-contractors involved to prevent future liens placed on your property.
To further protect your interest in the project, the bank will conduct monthly inspections to check the progress of the property construction. There is no charge for these inspections.
Once the construction on your new home is nearly completed, the next step is to apply for a permanent loan. We offer an array of traditional and progressive home loan options. Our friendly, experienced lenders can help you find the best loan for your new home.
Building a Home with Landmark Bank
At Landmark Bank, we make new construction loans possible, and streamline the process of building a home and buying that home with a full line of permanent financing options. Apply for home construction loans online today at Landmark Bank and find out how we can help make building a home your reality.