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    New Construction, Ground Up, Rehab, Remodel, Loan, Mortgage, One-close, Construction-perm, low cost, no cost, chicago, northshore, build, construction program, construction loan, construction loan expert, home addition, teardown, land loan, two-flat conversion, jumbo construction loan, interest only

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    CHICAGO CONSTRUCTION LOANS

    NMLS#523638

    847-214-2404

    16 North Spring St

    Elgin, IL 60120

    What Can I Do To Prepare For Applying For a Construction Loan?

    August 29, 2017

    |

    Ed Currie

    Being prepared to apply for a mortgage can be very helpful in making the process smoother.  Mortgage companies are required to “fully document” a file.  Below are a few items that can ensure your loan application is not derailed, and will also limit the amount of docum...

    Read More

    I have my own business, is that a problem?

    July 31, 2017

    |

    Ed Currie

    No.  It has no impact on the loan itself.  It will impact how much income documentation may be needed. Because lenders are required to fully document a file, complete personal and business tax returns with profit and loss statements as well as additional items may be n...

    Read More

    If I pay cash for the property, can I pull equity funds back out?

    July 30, 2017

    |

    Ed Currie

    For timing purposes, occasionally people will purchase a property with cash that they will be tearing down and rebuilding or remodeling. In most cases the situation dictates they close quickly and have no time to finance the purchase. In cases like this, a client can p...

    Read More

    Is the interest rate fixed during construction?

    July 29, 2017

    |

    Ed Currie

    Yes.  The rate is locked in prior to closing and fixed during the construction period.  A typical construction period is 12-18 months. Our construction loan products are ARM products fixed for a period, and amortized over 30 years.  

    Once construction is compl...

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    Do I need plans and a budget for a construction loan?

    July 16, 2017

    |

    Ed Currie

    Do I need plans and a budget for a construction loan? Yes. The appraisal on a construction loan is completed based on the plans, budget, specs and details provided to the appraiser. The more details you provide to the appraiser, the better chance for a favorable outcom...

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    Can I refinance right after construction?

    July 15, 2017

    |

    Ed Currie

    Can I refinance right after construction? Yes! Since the construction loans are ARM products, many clients will refinance shortly after construction is complete to a traditional 30 year fixed rate.

    Although the construction loan is for a 30 year term, the rate is not fi...

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    Can I purchase and close on my new property at the same time as the construction loan?

    July 14, 2017

    |

    Ed Currie

    Can I purchase and close on my new property at the same time as the construction loan? The answer is yes. However, depending on how much time you have, there can be some variables and time constraints.

    When you enter into a contract to buy a home or property, you have a...

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    Can I finance raw land or a vacant lot?

    July 13, 2017

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    Ed Currie

    Can I finance raw land or a vacant lot? The answert is yes. Raw land can be financed with a lot loan.  Lot loans are slightly different than a “typical” loan or construction loan in that they have higher interest rates and may require larger down payments.  The down pa...

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    Why do you need so much stuff?

    July 11, 2017

    |

    Ed Currie

    We in the mortgage industry ask that same question every day.  The quick answer is because we do.  The longer answer is that out of the financial crises of the late 2000s the Dodd-Frank Act was created which created the Consumer Financial Protection Board (CFPB) which...

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    What is a Construction Loan

    July 9, 2017

    |

    Ed Currie

    A construction loan is a mortgage loan that is used to help finance a construction project of various types.  The loan and appraisal is based on the completed project.

    If you are purchasing a property that you will do the construction work on, the loan will be based on...

    Read More

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    Do I need plans and a budget for a construction loan?

    July 16, 2017

    Can I refinance right after construction?

    July 15, 2017

    Can I purchase and close on my new property at the same time as the construction loan?

    July 14, 2017

    Can I finance raw land or a vacant lot?

    July 13, 2017

    How is the down payment or loan to value (LTV) calculated?

    July 5, 2017

    How much do I qualify for?

    July 2, 2017

    What documentation is needed for a Construction Loan?

    July 1, 2017

    What Can I Do To Prepare For Applying For a Construction Loan?

    August 29, 2017

    I have my own business, is that a problem?

    July 31, 2017

    If I pay cash for the property, can I pull equity funds back out?

    July 30, 2017

    Is the interest rate fixed during construction?

    July 29, 2017

    1/4
    Please reload

    LOAN PROGRAM

    A construction loan is a mortgage loan that is used to help finance a construction project of various types. The loan and appraisal is based on the completed project.

    If you are purchasing a property that you will do the construction work on, the loan will be based on the entire project of land cost plus construction cost as well as the appraisal.

     

    If you will be doing the work on a property you already own, the loan will be based on the completed project.  The original cost of the property may or may not be a factor.  Like a refinance, the construction loan will pay off any mortgage(s) you have on your home.

     

    The loan is a permanent mortgage with a 30 year term (sometimes referred to as a “construction-perm” loan).  There is one closing that takes place before construction begins.  If you are purchasing the property, the closing would take place at the time you close on the land.  There is no second closing once the project is complete. 

     

    Any down payment is required at the closing which is prior to construction beginning.  As long as you stay within budget, all funds for the construction project will be pulled from the loan during the construction phase.  If your budget increases during construction, you may have to make up the difference as items get paid out. 

     

    The down payment required (or equity if you already own the property) can vary widely depending on a few factors such as credit score and loan size.  Smaller loans with good credit scores allow as little as 5% down (or equity) with the down payment increasing as the loan size increases and credit scores drop.

     

    The payments on a construction loan are interest only during the construction phase based on the balance that you owe.  The balance when you close will be relatively low and then as draws are taken on the loan for work complete, the balance on the loan will increase.  So the interest only payment will start out relatively low as well and increase as the loan balance increases. 

     

    Once construction is complete, the loan moves into the permanent phase and the payment changes from interest only to principal and interest at the same interest rate.  There is no second closing and the loan does not balloon or come due.  You simply start making regular principal and interest payments.

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    New Construction, Ground Up, Rehab, Remodel, Loan, Mortgage, One-close, Construction-perm, low cost, no cost, chicago, northshore, build, construction program, construction loan, construction loan expert, home addition, teardown, land loan, two-flat conversion, jumbo construction loan, interest only

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    New Construction, Ground Up, Rehab, Remodel, Loan, Mortgage, One-close, Construction-perm, low cost, no cost, chicago, northshore, build, construction program, construction loan, construction loan expert, home addition, teardown, land loan, two-flat conversion, jumbo construction loan, interest only
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