Construction Financing allows for the financing of home repairs and modifications, to help you increase your home equity and create a desirable outcome when it comes to your dream home.
Let’s face it, no home is perfect, and when you make a long-term commitment like a mortgage, you want to make sure your home meets your needs and makes you feel comfortable.
Construction-Only loans are typically year-long loans designed to help you finance home renovations and repairs and are separate from a mortgage. Construction loans are considered high-risk loans and are harder to qualify for, because approval from contractors and municipalities are required to gain loan approval.
Construction-to-permanent loans are a type of loan for custom-home builders. This type of loan funds construction and then converts into a permanent mortgage, but during the construction phase, borrowers only make interest-only payments. These loans can be more expensive than traditional mortgages, but Juno Mortgage can help you find the best value for this loan option.
Construction financing requires a good credit score for your FICO and company credit scores, a review of financial documents, and typically a down payment of 20% of the total construction cost for the entire project. Lenders typically view construction loans as risky as there is no existing financial backing for the project, therefore the size of your down payment is contingent upon the total cost for the project.
Lastly, the reputation of the builder must be assessed first to make sure the project will be completed. Juno Mortgage can assist you with finding a construction loan which works for you.
