Your Personal Guide to New Home Construction Loans
Whether you are looking for a model home, or prefer the opportunity to be more involved in the customization of your plans, Bell is here to help. Our borrower-financed construction lending program is designed to provide you flexibility and control when building your new home.
When considering building a new home, what comes first?
- Talk to your mortgage professional about determining how much you can afford, then start making definitive plans.
- Evaluate your lifestyle and plans for the future when identifying your new home’s style.
- Select a builder by visiting model homes and inspecting their work.
Why work with Bell Mortgage?
- The entire construction loan process is handled in-house, from the application to the draws through the end loan refinance. This feature helps ensure a steady and reliable process.
- Bell associates only with high quality, dependable builders. We require builders be approved by our construction department prior to starting any project.
Benefits to building a new home with Bell Mortgage’s new construction loan
- You will be involved in the design process. You can put your signature on different aspects of your home and can make sure your home suits your needs and desires.
- Costs for financing are transparent and known upfront – not included in a home’s cost.
- Low down payments allowed, certain financing costs are tax deductible, and you are involved throughout the progress of the construction project.
- New construction allows you to take advantage of today’s technology and energy-efficient home designs and appliances.
What is a draw?
A draw is the method by which funds are disbursed from the construction loan to pay for building materials and labor.
When a draw request is submitted, Bell’s construction loan department ensures that the goods and services included in the request have been delivered or installed. This request must have approval by the future home owner, providing you with peace of mind that the project is progressing according to your expectations.
How does the construction loan process work?
Once the borrower finds a builder and completes the steps of identifying the new home they would like to build, the construction loan process can start.
- A construction loan begins like any other loan: with an application.
- The Bell Mortgage underwriting department will analyze a borrower’s income and asset situation along with their debt and payment history.
- An appraisal based on the home’s blueprints and design specifications will be also be reviewed.
- Bell’s underwriting department will simultaneously assess the construction project and the end loan, and will grant approval for both before construction begins.
As stated above, there are actually two loans: one provides funds for building costs throughout the construction process, and a second (the end loan) is used to pay off the construction loan and provide the long term financing option selected by the borrower.
How do I ensure a successful construction process?
Communicating effectively with your builder as you prepare and plan your construction project is essential. Establish expectations up front, and you will likely have an enjoyable homebuilding experience!
Working closely with your Bell loan officer will help ensure the loan approval process is smooth and hassle-free. Providing requested information in a timely manner and responding to requests for clarification or supporting documentation expedites the entire process.
Remember, you’re not just building a house – you’re building a home – and we would love to help you move smoothly into the place where you and your family will make memories for years to come.
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