You may choose to arrange for your own construction and permanent financing. If so, we will be happy to provide your bank with any information they need. Or, like many we have helped in the past, we can help you with this. Lenders we work with offer very competitive interest rates and closing costs. Plus, since we are an approved FHA/VA builder, we can help expedite your FHA/VA application.
Below we have provided general information about the home financing process. Please keep in mind that not all lenders offer all programs and many have their own special requirements for financing. Please contact our office for additional information.
LAND PURCHASE & PAYOFF
All or some of the purchase price for land or a building lot may be included in your construction and permanent mortgage financing. If you do not own land yet, it is a good idea to pre-qualify to help you budget for your land purchase.
Down Payments may be made with your own funds, equity in your land (provided the lender's appraisal supports it) or a gift from a relative. Many 401K plans allow you to borrow the down payment for a home. Conventional and Construction/Permanent Mortgages typically require from 5% to 25% of the total cost to build down prior to start of construction. The down payment amount varies depending on your creditworthiness and the availability of Private Mortgage Insurance. FHA/VA Mortgages typically require 0% to 5% down prior to start of construction.
Conventional and Construction/Permanent Mortgages offer the most flexibility and higher loan amounts. Programs available for Conventional and Construction/Permanent Mortgages include but are not limited to: 15-30 year fixed rates; 1 to 10 year fixed rate that adjusts after the fixed rate period; interest only payment options. These loans may have higher qualifying standards and require a larger down payment. FHA/VA Mortgages typically have easier qualifying standards and require little or NO MONEY DOWN. FHA Mortgages are capped in Georgia at a maximum of $346,250.00. However, the actual maximum varies depending upon which county you intend to build your home. Click here to go to the FHA website for the maximum loan amount for your specific county in Georgia. VA Mortgages are capped at a maximum of $417,000.00. However, the actual amount may vary depending upon which county you intend to build your home.Click here for further details on VA loan amounts. Programs available for FHA/VA Mortgages include but are not limited to: 15-30 year fixed rates, 1 to 5 year fixed rate that adjusts after the fixed rate period.
If you do not have the funds (or do not wish to use your funds) to build your home a Construction Loan will be required to help pay for costs during construction. Conventional and FHA/VA Mortgage borrowers will need a separate Construction Loan which will be paid off by the Conventional and/or FHA/VA Mortgage lender once construction is complete. Construction/Permanent Mortgages are Conventional Mortgages paired with a Construction Loan from the same lender. These loans typically have only one closing prior to construction and may save you some closing costs. We work with many Construction and Construction/Permanent lenders and will be happy to assist you in obtaining a low-cost construction loan.
CLOSING COSTS AND CONSTRUCTION LOAN INTEREST
Closing Costs and Construction Loan Interest for a Construction Loan plus a Conventional or FHA/VA Mortgage typically ranges from about 7% to 8% of the loan amount. The costs for Construction/Permanent Mortgages typically range from 5% to 6% of the loan amount. If you prefer, we are able to include these costs in the Purchase Price of your home and you may have little or no "out of pocket" expense.
Eric Edwards Construction’s Preferred Lender:
Michael Collins Guild Mortgage 307 West Emery Street Unit C Dalton, GA 30720 O: (706) 277-0760 | M: (706) 270-4788