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New Construction Loan

A new construction loan is a specialized type of mortgage designed to finance the construction of a new home. Unlike traditional mortgages that fund the purchase of an existing property, new construction loans provide the funds needed to build a home. These loans typically cover the costs of land, materials, labor, and other expenses involved in the construction process.

 

Why Choose a New Construction Loan?

  • Custom Home Builders: If you're looking to build a custom home from the ground up, a new construction loan provides the financing you need to turn your vision into reality.
  • Homebuyers with a Specific Location in Mind: For those who have already identified the perfect plot of land and need financing to build, this loan is ideal.
  • Investors: If you're interested in building a home for resale or rental purposes, new construction loans can be an excellent way to finance the project

 

Click the drop-downs below to learn more about New Construction loans

  • Credit Score: Most lenders require a credit score of at least 620 to qualify for a new construction loan. 
  • Debt-to-Income Ratio:  Lenders typically look for a DTI ratio of 45% or lower.
  • Down Payment: A down payment is usually required for a new construction loan, and varies based on if the loan is conventional, fha, etc.
  • Builder Approval: The lender may require you to work with an approved builder or a builder who meets their criteria.
  • Construction Plans: Detailed construction plans and a realistic budget must be submitted as part of the loan application.
  • Control Over the Process: A new construction loan gives you full control over the home-building process, from selecting the location to choosing the design and finishes.
  • Customizable to Your Needs: Unlike buying a pre-built home, new construction allows you to customize every aspect of your home, ensuring it meets your exact needs and preferences.
  • Potential for Increased Value: Building a home can be a smart investment, especially if property values in your chosen location are on the rise.

  • Draw Schedule: Funds are released in stages, known as "draws," as construction milestones are met. This ensures that you only pay interest on the money that has been disbursed.

  • Interest-Only Payments: During the construction phase, you'll typically make interest-only payments based on the amount of the loan that has been drawn. Once the home is complete, the loan can be converted into a traditional mortgage, and you'll begin making principal and interest payments.

  • Flexible Terms: New construction loans offer flexibility in terms of loan amounts, repayment schedules, and interest rates, allowing you to tailor the financing to meet your specific needs.

New Construction Mortgage Timeline

The new construction mortgage process depends on whether you choose a one-time or two-time close

1
Consultation
2
Eligibility
3
Pre-Approval
4
Builder
5
Application
6
Approval
7
Construction
8
Closing
9
Support

Consultation

Schedule a Complimentary Buyer Consultation

Begin by contacting us to set up a consultation where we’ll discuss your loan options and introduce you the process. You may contact us through the form on this website, or send an email to [email protected].

Eligibility

Check Your Eligibility

During the consultation, we’ll discuss your credit score, income sources, and current debt to ensure you meet new construction requirements. We’ll also advise on any steps you can take to improve your eligibility if needed.

Pre-Approval

Get Pre-Approved

Our team will help you gather the necessary documents, including pay stubs, tax returns, and credit history, to get pre-approved. Pre-approval not only gives you an idea of how much you can borrow but also strengthens your position when making an offer on a home. We only require a soft-pull for pre-approval, which will have no impact to your credit score.

Builder

Select Your Builder

Choose a reputable builder who has experience with new construction projects. You'll need to provide detailed plans and a construction timeline to your lender.

Application

Submit Your Application

Once you’ve found the right home, we’ll assist you in completing your loan application. This includes submitting all required documents and ensuring everything is in order for underwriting.

Approval

Loan Approval

Once your loan is approved, construction can begin. The lender will disburse funds according to the draw schedule, and you'll start making interest-only payments.

Construction

Construction Phase

During construction, the lender may require inspections at various stages to ensure that the project is progressing as planned.

Closing

Final Inspection and Loan Conversion

Once construction is complete, the lender will conduct a final inspection. If everything is in order, your construction loan will convert into a permanent mortgage.

Support

Post-Closing Support

Our relationship doesn’t end at closing. We’re here to support you with any questions or needs you might have as a new homeowner. Whether it’s understanding your mortgage payments or planning for future financial goals, feel free to contact us for assistance.

Work With Us

Your journey to homeownership begins with knowledge and ends with the keys to your dream home in hand. Let’s take the first step today and turn your homeowning dreams into reality. Work with us today!
Contact Us

Get In touch

MARQ Mortgage

Phone

330-293-1369

Email

[email protected]

Address

114 Barrington Town Square Dr Aurora OH, 44202

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