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Construction Loans
There are loans for building your new dream home.
Today there are programs that are called Construction to Permanent Loans (CTP Loan).
These loans include New Construction and ReHab properties.
Every construction project is unique, and it is important
to discuss all your options so there may be sufficient funds to carry you through the entire
construction period. Your builder will let you know the estimated time of completion of the
home, and your loan can be structured to allow for a period of 6 to 12 months or more.
The funds for the construction are paid to the contractor
equal to the percentage of completion. For example, if your home is 40% completed than
40% of the appraised value can be released to the contractor.
Interest payments during the construction period can be
placed in a reserve account and added to the loan amount leaving you with no out of
pocket expenses while your home is being built.
Once your home is completed, your loan will convert into
a permanent loan including principal and interest payments. You will have had only one
appraisal and one closing. Construction loans can be obtained using Full Doc, Limited Doc,
Stated Income or No Ratio loan programs.
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