We Can Help You Fund Your Construction Project
Are you thinking about building your new home or office from the ground up? If so, then you should be prepared for a different application process than that of a traditional mortgage or loan. When securing the finances for an upcoming building project, you must apply for a construction loan, which can be a long and confusing process. In order to help you better understand construction loans, the experts at Clover Mortgage have put together this brief introduction.
Construction financing is a high-interest, short-term loan used to finance the construction costs of property building projects. There are two main types of construction financing currently used to fund real-estate construction.
A completion mortgage doesn’t require the borrower to pay the builder until construction is complete and they have access to the finished property.
With this option, you are not required to make any payments until you are given possession of the newly built property. Similarly, if you would like to upgrade or change the terms of your mortgage you are free to do so until 30 days before you gain access. On the other hand, if your financial situation changes for the worst during the building period, it could jeopardize your mortgage approval. It is best to avoid making any major financial decisions while you are waiting to receive the funding for your completion mortgage.
A draw mortgage gives the borrower access to parts of the loan amount in increments throughout the building process. The first portion is optional when the project is 15% done. The second portion of the loan is given when the property if approximate around 40% complete. The third portion is given when the property is approximately 65% complete, and the fourth portion of the funds are provided when the property is approximately 85% complet. The final amount is funded once the project is finalized.
This option is beneficial because it allows the borrower to finance the construction upfront without having to worry about how to fund the building process. It also helps the builder stay on track because they must pass inspections before receiving each of the subsequent payments. This type of mortgage can be more expensive in the long run because the borrower must cover the cost of each inspection. You begin procuring interest on your loan as soon as you receive your first payment. You also don’t have the option to upgrade or change your loan terms once you accept your first payment.
When should you use construction financing?
Construction financing can be used by either individuals or companies to fund multiple different types of projects. Below are several common uses:
- Single home construction
- Sub-division or high-rise construction
- Commercial property projects
- Conversion or restoration developments
- Storefront Apartment construction
Whether you are looking to build a small family home, a townhouse or a big commercial building, the experienced, knowledgeable, and trusted construction mortgage agents at Clover Mortgage can help get you started today.
Why Work With Us
*Rates start as low as 4.55%
*Rates are subject to change. Terms and conditions may apply.
We pride ourselves on quick, easy & honest service. Our clients always come first.
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I was in debt and needed help getting back on track. My mortgage agent at Clover Mortgage helped me get approved for a home equity loan to consolidate all of my debt in one small monthly payment. Now I’m saving over $1,000 a month in interest and am left with less debt and more money in my pocket at the end of each month. Thank you Clover!
I’m a self employed independent contractor. I earn a decent income, but when I went to the bank to refinance my home, they denied my application telling me that I didn’t have enough “provable” income to qualify for refinancing my home. When I came to Clover I was almost out of hope. My Mortgage Agent at Clover was caring and professional, and help me get a great rate and flexible terms on full refinance. The whole process took less than 48 hours! I was impressed at how quickly and easily they were able to get me the money and home refinance I needed. Thank you Clover Mortgage, I’m recommending you to everyone I know!!
I had really bad credit, but really wanted to purchase a Condo. When I went to the bank they made me go through a lengthy application process that took weeks, and then they turned me down at the end of it all. When I found Clover Mortgage online, I called them and a friendly Mortgage Agent was able to help me get approved for a mortgage quickly and hassle-free. I got a good rate and now live in a home that I am comfortable in and am able to easily afford my monthly payments.
I definitely recommend Clover Mortgage to any new home buyer! They were very professional and helped my husband and I get mortgage for our new home at an even better rate than the bank was offering us. They also helped us get the mortgage with a smaller down-payment than the bank demanded from us. Since we did our mortgage with Clover, several of our friends and family members got their from them also, and Clover Mortgage has been able to help all of them, even the ones that were completely turned away and rejected by their banks.
My husband and I found ourselves in a tough situation. Luckily my expert mortgage broker at Clover Mortgage helped us get a fast and easy approval for an amazing rate for refinancing our home. Clover’s service is the best I’ve ever experienced and I’ve been recommending them to all of my family members and friends ever since. Thanks for your help Clover!
I definitely recommend Clover Mortgage to any new home buyer! They were very professional and helped my wife and I get mortgage for our new home at an even better rate than the bank was offering us. They also helped us get the mortgage with a smaller down-payment than the bank demanded from us. Since we did our mortgage with Clover, several of our friends and family members got their from them also, and Clover Mortgage has been able to help all of them, even the ones that were completely turned away and rejected by their banks.