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You are here: Home / Construction Loans / What is the Process for a Construction Loan?

What is the Process for a Construction Loan?

May 11, 2021 By Ralph Gates

Congratulations on your decision to build a new home! Or maybe, you intend to stay in place but want to remodel your current one. In either case, there’s plenty to be excited about. Now it’s time to consider a construction loan for your build or remodel. Here’s what you need to know about the construction to permanent loan process: 

Apply with a trusted financial institution. 

You will need the same documentation that you would provide for a conventional mortgage loan.

  • 2 months bank statements 
  • Last 30 days of paystubs 
  • 2 years tax returns 
  • Driver’s license 
  • Property lot information 
  • Builder’s plan and cost sheet

Approval

Your construction loan will cover the cost of the lot and the construction phase. This includes the building, architectural design, permits and other cost associated with the building of your custom home. 

Construction 

Construction loans are a line of credit. This line of credit is for paying the cost associated with the building of your custom home. It works just like a credit card. You make a charge as you need money to pay the construction bills. This charge is called a draw.

A draw request is completed by you or your builder.

The request is approved and signed by you and forwarded to the lender. Lender will review and send the inspector to your home.

Requested money will be advanced and put into your account. Like any credit card you will pay interest on the money advanced. The line of credit balance will increase as you take draws.

The payment of interim interest is made monthly. 

Types of Construction Loans 

There are two types of construction loans available to borrowers. 

The One-time Close loan is a mortgage program that finances the construction, lot purchase, and permanent loan of your custom home, all wrapped up in a single mortgage with a single closing. 

The Two-time Construction loan will require that you get approved for two separate loans. The first loan will fund the physical construction of your custom home and upon completion you will then apply for permanent financing. 

Whether you’re starting a ground-up build or remodeling your home, Mid America Mortgage offers several types of construction loans to help you make your home the home of your dreams. Find out which one is the right loan for your situation. Contact Mid America Mortgage today to get one step closer to walking through the front door of your future home!

Contact Us

 

Filed Under: Construction Loans

Contact Us Today

Mid America Mortgage Services, Inc, NMLS #1142067
200 E Walnut St.
Columbia, MO 65203

Phone: (573) 875-1100

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"My wife and I have moved around quite a bit with my job so we have been through the process before, but we have never had anybody help us as much as Michelle West Mid America Mortgage Services, Inc did. We needed a loan for a new construction home and they were able to help us out with all of our needs and make us feel comfortable with what we were doing moving forward. They did a good job of walking us through the paperwork to make sure that we were pre-approved for a certain amount."

Jason

"I have had mortgages since 2004 in Columbia and have gone through a couple of banks, but over the last several years, the last couple of houses have been with Mid America Mortgage Services, Inc. Michelle has told us many times, 'I am not going to put you in a situation I am not comfortable with you being in, regardless of what it means for our company'.

Heidi always has a smile on her face and when you walk through the door, they recognize you and say “Hi”. I definitely recommend anyone who is in the home buying, purchasing, refinancing, upgrading business to go to Mid America Mortgage Services, Inc, ask for Michelle because they are going to be the best person you can work with."

John

Michelle, I want to thank you for all of your efforts on the loan. I never knew how much information the needed! I appreciate your personal nature and ease of working together. Thank you for making this happen! :)

Amy

"I knew Jeanie Byland for a long time. She made the process so easy. One of the things I probably appreciated the most was that she didn't want to spoil the excitement of closing on a new house by showing up on closing day finding out that we owe a lot more than we thought. They were upfront with that information right from the get-go, and that’s because it’s just like they say, ‘They wouldn’t put you in a loan that they would be comfortable taking themselves.’”

Jamie

"My family owns Tiger Ice Company. My experience with Ralph at Mid America started with Tiger Ice because we needed to expand our facility. When we went in to talk to Ralph at Mid America, he pretty much was straight up with us and told us we needed to go back to the drawing board. We came back with new numbers and a new plan, and we built the facility and everything was fine. Our dream of that would not have been possible at all without Mid America Mortgage Services, Inc and Ralph. They don’t tell you what you want to hear, they tell you the truth and that's what we weren't getting from other banks."

Andy

"They really explained the process to us very well and made us feel very comfortable, specifically Jeanie Byland. I have never asked a question that I felt dumb about. They really wanted to educate us and have been fantastic. The interest rates changed one day and they called me to say, ‘Hey we might ought to look into refinancing your loan’. I really felt like they had our best interest at heart."

Steve

"When we were 18 and 19 years old no one wanted to help us get started. But Michelle took us under her wing 6 years ago next month. There is a lot of people out there that could of taken advantage of us many of times because we had no idea what was going on. For Michelle to stand beside us and walk us through, and not let us get into something that could get us in a lot of trouble means the world. We thank Michelle and we are extremely blessed to be able to work with her and her team. I have never even thought about talking to another lender and will always be loyal to Mid America Mortgage Services, Inc."

Cody and Morgan

"One of the main things that I loved about Michelle was she was so organized. She would meet us at any location she needed to, and to be honest she had the absolute lowest interest rate. They were always very transparent with fees so there were no surprises. Michelle was always super easy and we would always run in talk to her even it was for a few minutes. The best thing was the process was very, very smooth."

Chris and Jamie

"I’m a very loyal customer at Mid America Mortgage Services, Inc. I have an addiction to building houses and designing them, and they are always right there with me every step of the way helping me get the best loan product and the best rates whenever I am ready to build. They make sure you don’t get a loan that you can’t afford. The whole process was very smooth. I would recommend Mid America Mortgage Services, Inc to anyone because they are always there to teach you, help you, and make it easy for you every step of the way."

Kate

Selling our home of 17 years and building a new home was a very emotional time for our family. We were ready for the next adventure in our lives but knew there were numerous steps involved. The search for a mortgage officer was simple, Michelle was our choice. Her guidance and knowledge made the process as easy as possible. When we had questions, she was always there to give us an answer and discuss our options. The employees of Mid America Mortgage Services, Inc like Michelle will keep us returning for our mortgage needs.

Chad and Julee


Phone: (573) 875-1100
200 E Walnut St, Columbia, MO 65203

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