Planning to build your dream home? If so, a construction loan may be right for you. Construction loans are short-term, interim loans used for new home construction. The contractor receives disbursements as work progresses. Contact Mike Kachadorian, an experienced U.S. Bank loan officer, to learn more about construction loans and to discuss current construction loan rates.
Let’s Build Your Dream Home Together
Talk to Mike about loan options for your new home construction
Talk To Mike
How One-Time Close Construction Loans Work
Get pre-approved
Find a knowledgeable construction lender and get pre-approved for your new construction loan.
Select your lot
Find a lot to accommodate the home you want to build. The dimensions, pitch and location can all factor into the size and type of home you want to build.
Select your builder
Educate yourself on the builders in your area by attending home builder shows, talking to vendors or requesting a builder’s report.
Submit your contract
Provide your blueprints and the construction contract. The contract should be as detailed as possible and include a spreadsheet itemizing all the costs associated with the construction of your new home.
Close & lock your rate
Plan to close on your construction loan with your loan officer. If you are choosing to request conversion to a fixed-rate mortgage loan, you will be able to lock your rate up to six months before your construction is complete.
Get ready to move
Once the construction phase is complete, the loan may be converted into a fixed-rate mortgage with regular monthly principal and interest payments.
TESTIMONIAL
Mike Whalen
“Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam fringilla est sapien, nec semper neque auctor nec. Duis vehicula quis mi at vehicula. Vivamus at. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam fringilla est sapien, nec semper neque auctor nec. Duis vehicula quis mi at vehicula. Vivamus at. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam fringilla est sapien, nec semper neque auctor nec. Duis vehicula quis mi at vehicula. Vivamus at. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam fringilla est sapien, nec semper neque auctor nec. Duis vehicula quis mi at vehicula. Vivamus at. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam fringilla est sapien, nec semper neque auctor nec. Duis vehicula quis mi at vehicula. Vivamus at.”
Mike WhalenPresident, Whalen Custom Homes
TESTIMONIAL
Thomas Peroutka
“I've had the pleasure of working with Mike Kachadorian on both new home construction loans and mortgage refinancing. Mike is honest, trustworthy and always giving me advice on what loan is best for our situation. He educated me every step of the way to make sure I understood the mortgage process and made the home buying experience such a breeze. Whenever we had any questions or needed anything, Mike was available and very flexible. He went above and beyond to make sure we were taken care of. I highly recommend Mike because financing is such a crucial, yet scary, part of the home buying process and Mike made the entire process easy and stress-free!”
Thomas PeroutkaNew Home Construction Client
Frequently Asked Questions
What is the first step I should take when considering building a home?
Meeting with a mortgage loan officer and getting started with a pre-approval is one of the most important first steps you can take. A Johnson Financial Group pre-approval is a fully underwritten loan approval that includes verification of your income, credit and down payment funds. A pre-approval will determine what type of home you can realistically afford based on your current assets and existing debt. A pre-approval also provides the opportunity to ask questions about the construction process: what’s involved, what you are responsible for and what to expect of the builder.
What documents and information do I need to get started?
Use the checklist below to gather your documents for the pre-approval. Having this information readily available can make the process quick and easy.
- Your Social Security number to obtain your credit report
- Pay stubs, W-2s and possibly full tax returns for income documentation
- Bank and asset statements for verification of liquid and retirement savings
- Any other necessary information based on your individual situation like business tax returns, current real estate holdings, etc.
- A lot loan closing statement, if you already own your lot
Additional documents and information (when available)
- Accepted offer to purchase – if purchasing the lot at the time of closing on your construction loan
- Construction plans
- Builder cost breakdown and specs
- Complete signed builder contract
- Insurance coverage, including builder’s risk insurance – prior to closing
What should I consider when planning my budget?
Create a detailed budget to ensure you don’t overspend. Leave yourself some “financial breathing room” as new construction projects can often cost more than expected. Savings reserves are helpful should you encounter cost overages during the build process.
What should I consider when choosing my lot?
Make sure the lot you plan to purchase can accommodate your new home. The dimensions, pitch and location can all factor into the size and type of home you want to build. Regardless of your desired location, you’ll almost always need to choose the land before you begin the design phase. In some cases, the complexity of the building site (steep terrain, remote locations, undeveloped land, etc.) may directly impact the cost of the project.
How do I finance my lot?
A lot loan allows you to purchase land before you start construction. Once you’re ready to build, your lot loan can often be rolled into the financing of the construction loan. You may need to plan for 60 to 70 days for closing. This gives you time to review the contract and develop plans, and it will ensure you have enough time to complete an appraisal.
Do I make payments during the construction process?
During construction, you’ll make interest-only payments based on how much of the construction loan funds have been drawn to date.
