Build your perfect home with Mann Mortgage’s customized Construction Loans!
Construction loans make building Your Dream Home surprisingly easy and affordable.
What are construction home loans?
At our Billings Office, we understand that construction projects demand specialized financing solutions, and that’s where construction loans come into play. This comprehensive guide will walk you through the intricacies of construction loans, empowering you to make informed decisions that align with your goals and financial circumstances.
Not sure where to get started? That's okay too, we're happy to meet you where you're at and direct you to the right place or person.
The MannMade construction loan process.
Construction loans are specifically designed to fund the construction of a new home or the substantial renovation of an existing property. They cover the costs of labor, materials, permits, and other expenses associated with the construction process.
Typically, construction loans have two phases. The first phase involves the disbursement of funds during the construction, while the second phase is the conversion to a permanent mortgage after construction is complete.
- These loans are short-term in nature, often with terms of 6 to 18 months, during which you’ll make interest-only payments on the outstanding balance.
- Interest rates for construction loans can be either fixed or variable and tend to be higher than traditional mortgage rates due to the higher risk associated with construction projects.
- Borrowers typically need to make a substantial down payment, often around 20-25% of the project’s total cost, to secure a construction loan.
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To qualify for a construction loan in our Billings Office, you’ll need a solid credit history, a detailed construction plan, proof of income, and the ability to make a substantial down payment. Our experienced loan officers can guide you through the qualification process.
After the construction phase, your construction loan will be converted into a permanent mortgage. This process is known as a “construction-to-permanent loan.” You’ll start making regular mortgage payments, typically with a fixed interest rate.
Yes, you can use a construction loan for major renovations on your existing home. This is often referred to as a renovation or renovation-to-permanent loan, allowing you to finance significant upgrades or additions.
Funds from a construction loan are typically disbursed in increments, known as “draws,” at various stages of the construction process. An inspection is usually required before each draw to ensure the work is progressing as planned.
The choice between fixed and variable interest rates depends on your risk tolerance and financial goals. Fixed rates provide stability, while variable rates can offer lower initial payments but come with the potential for rate fluctuations. Our loan experts can help you weigh the pros and cons based on your specific circumstances.
“I was always in the loop on my loan process. I loved the one-time close construction loan. It saved me thousands to be able to lock in the interest rate.”
Josue Gabriel Lopez
Let's get you home.
Borrow up to 97% of a home’s value with as little as 5% down. Our local loan experts will help guide you.
