Borrowers will need a construction loan if they intend to purchase a home in a new development or if they are building a custom home. Construction loans are necessary because of the longer time frame and special requirements of the building process.
Many mortgage lenders offer borrowers One Time Close construction loans. This type of construction loan will finance the construction of a primary or secondary residence and the permanent loan when construction is finished. A One Time Close construction loan requires borrowers to sign only one set of documents and allows borrowers to lock in a rate for the permanent loan at this time. This type of home loan will allow for 12 months of construction time and during the construction period, interest is charged only on the funds that have been disbursed.
There a few documents and qualifications that borrowers will need to have when they begin the application process for a construction loan. Some of the qualifications mortgage lenders will require are a minimum credit score of 620 and sufficient liquid assets. The documents construction lenders will ask for include a building department permit and many require that construction be completed within 12 months.
A Minnesota construction loan can help you build the home of your dreams in Minnesota. Our Minnesota construction loan experts can help you choose the Minnesota construction loan that is right for you. Contact Next Generation Lending, Inc to discuss your Minnesota construction loan.
