A construction mortgage is a loan that allows funds to be disbursed in stages while the house is being built. If the construction does not go according to the PLAN presented to the bank, it is difficult for the lenders to obtain their money back. Clients are often expected to complete each step of building using their own funds, according to the Bank. Each draw requires an evaluation by a professional appraiser, with an inspection report detailing the percentage of completion.

• First draw is to use for the purchase of Land.
• Second draw normally at 35% completion of work up to windows, doors and roofing.
• Third draw normally at 65% completion of work up to fixing dry walls.
• Fourth draw normally at 97% completion of the construction.

You have two alternatives for a Construction Mortgage; you must sign a contract with a registered builder to have your house built. The builder will utilize your construction mortgage finance to construct your home, or you can act as your own contractor and engage a subcontractor to complete the work.

If you have a decent family income and your credit is excellent enough to meet the bank’s lending criteria, the best option for obtaining a construction mortgage is go to a bank. During the construction period, you may pay a higher interest rate, but once the work is completed, you can select between fixed and variable mortgage rates.

If you are unable to obtain permission from traditional banks or local credit unions, private lenders will be a viable alternative. A greater interest rate may be charged by the private lender. When others declare they are unable to assist you in the current situation, they will lend you money. The client has the choice to change to any Bank/Lender for the BEST INTEREST after the house is completed.

Red Star Mortgage Group Professionals will assist you step by step to get construction mortgage by providing amazing services.