Ramin Hallaji
Ramin Hallaji
Financing a construction project is one of our specialties.
Let us reach out to multiple lenders that want your business.
We have access to hundreds of private lenders.
Getting funds for your new construction projects can be challenging to achieve, especially for someone who isn’t earning much, has many responsibilities, or doesn’t have who to run to for financial help.
And while seeking funds from external sources, many of you might have come across people who suggest that you apply for a construction loan.
Applying for a construction loan might be a good idea. Still, before you decide to go along with the offer of a construction loan, you must know the necessary information about what a construction loan is, its advantages, and many other beneficial details.
A construction loan is a loan granted to a builder to assist them in financing the construction of their projects (homes, offices, stores, shops, etc.). This loan in question is a short-term one used to cover different costs (such as cost of land, cost of labor, cost of building materials, permit fees, and more) about building the building projects.
This type of loan is always facilitated between a lender and the borrower (the builder). When the builder applies for a construction loan, instead of handing out the entire loan to the builder at once, the lender breaks down the loan disbursement in bits according to each building milestone.
This is why the builder has to provide a detailed blueprint, a time line and a budget to the lender at the beginning of the whole thing.
Unlike the traditional mortgage, construction loans don’t come with tangible collateral, unlike a traditional mortgage, and for this reason, getting qualified for a construction loan can be a very tedious task as different lenders would go a long way to make sure that they don’t back the wrong horse as this loan is a highly risky one to give out.
To qualify for a construction loan, the builder must meet some stringent requirements as stipulated by the lender.
One of the perks of construction loans is that you can also apply for one to upgrade your building projects.
Construction loans are not only suitable for new building projects, but they can also be used to finance the upgrades of existing building projects.
Another reason why construction loans are better for every home builder is that you have ample time to repay these loans, unlike traditional loans. There is a longer time frame for you to repay a construction loan than a normal bank loan.
The best part of construction loans is that instead of buying a home constructed according to someone else’s specifications, you can actually build a home of your own according to your specifications.
While the idea of applying and securing a construction loan sounds like a dream come through, you have to understand that construction loans attract a high interest rate than the traditional mortgage rates.
These interest rates differ from one lender to another, and this is why we advise that you seek out the best lenders with the best interest rates for you.
We'd be happy to answer your questions. Giving us a quick call is the first step to finding your best solution.
Call Now
