If you’re planning on having a house built in New York or New Jersey, a Construction Loan may be the right loan for you. Unless you already own land, SunQuest Funding will provide financing for the land acquisition and the building construction. A construction loan is usually a variable-rate loan with a maximum term of 12 months.
During the Construction loan qualification process, SunQuest Funding will need to see detailed plans, a realistic budget, and a construction timetable; this information is sometimes called the “Story” behind the loan.
Once the approval process is completed, you’ll be put on a draw schedule, sometimes called a bank draft schedule, that will follow the construction timetable. Many Construction Loans require interest-only payments during the building stage. Prior to each draw, someone will usually come out to the construction site and verify the construction progress.
Once the construction is finished, the contractors have been paid and all liens have been satisfied, and you’ve received a certificate-of-occupancy, it’s time to convert the Construction Loan liabilities into a standard mortgage. SunQuest will do that too.