You have a lot to think about when you decide to build your home from the ground up. Not only will you need to consider location, but you also need to think about design and which bank is best for construction loan assistance. In order to get a decent construction loan in Long Island, it is a smart idea to do your research in advance. Because there is a bit more involved with applying for this type of loan over a conventional mortgage, knowledge is power.
Is It Harder to Get a Construction Loan?
You might find that a construction loan might be a bit more difficult to qualify for. These loans are flexible to the point that they often come with qualifying standards that are higher in terms of down payment and credit. In many instances, the borrower might need at least a down payment of 20% and a credit score that is 680 or higher.
How Long Should It Take to Get a Construction Loan?
When looking for construction loans in Long Island, NY, you can usually expect the loan period to last up to 12 months. There is a lot of preparation time involved, and for processing, it can take up to 60 days for the construction loan signing. The timeline here will depend on how the plans for the house are complete, and all of the costs and bids are solidified.
Can You Get a Construction Loan to Buy Land?
Getting a construction loan can be a bit different because they allow for funds to cover a new home, business structure, or a garage. You may also be able to utilize it for buying land or renovating. The good news is that these loans can be flexible, and it is all about working with the best lender.
Essentially, a construction loan in Long Island is there to cover the cost of materials and labor for building brand-new homes. Some items that could be eligible to finance while using your construction loan will include:
- Contractor labor
- Framing costs (home and roof)
- Interior finishing
- And many other expenses incurred while building a house
A construction loan is going to come with a variable rate, meaning that it will fluctuate with the prime rate. You will often find that rates for a construction loan will be higher than rates for a traditional mortgage loan. However, the bank will not have the option of seizing property with a construction loan like they would with a mortgage that goes into default.
Do you want to know more about getting a construction loan in Long Island and how it can work for you? There are many pros and cons to this process, but we are here at Lynx Mortgage Bank to address any concerns that you have each step of the way. Contact Lynx Mortgage Bank to learn more about our products and programs by calling (877) 599-LYNX. We are here to discuss all of your lending needs, and we are available to ensure you get the loan that you need for your new home!