Charter Funding Construction Loans

In case you have not dealt with, or heard of, Charter Funding Construction Loans, here is a short informational message that will explain why we are construction specialists and perhaps why you should be working with us.

As you may know, when you are looking for a construction loan, you certainly should be working with a company that specializes with construction loans. A standard bank or mortgage loan company can provide you with the money to start the process but, will they completely understand the intricate details to make sure that you have enough money, a loan for a long enough period of time, and will they know what to do if a problem occurs during construction? Most standard lending companies will not. At Charter Funding Construction Loans, the sometimes complicated process of securing a construction loan is our main focus.

We are construction loan experts. Contact us now!

How To Structure a Construction Loan:

In order to structure a construction loan correctly, you should have some idea of the following key components:

1.) Appraisal Value – Once you have a lot picked out and a preliminary set of plans of the custom home that you would like to build; the next step is figure the appraisal value. A state certified/licensed appraiser who is able to perform a plan and specification appraisal based on your home plans will determine a value using the sold comparable homes in that area.

2.) Maximum Loan Amount – A lender will lend to a certain percentage of the pre-determined value, holding the difference as part of the overall project collateral. This is the loan to value. Your strength as a ‘borrower’ along with the loan to value lender guidelines will be the deciding factors on which construction loan product you will qualify for and your maximum loan amount, also known as MLA. History of credit, employment, rent/mortgage and assets are typical factors of strength.

3.) Cost-To-Build – Using your home plans and a material take-off process you can calculate an idea of the cost to build. Once you have a preliminary set of plans, you can start to decide what, if any, modifications you may need or want. You should visit your local building department to get a breakdown of soft costs, permit and impact fees can be a critical part of the cost to build. You can also find out if engineered plans are required. Once the plans are finalized by the designer and engineer, you can gather material costs and start to collect labor bids and material pricing.