Chat with us, powered by LiveChat

Did you know that a construction loan can help you finance your Value Build home and your land?

It rolls into a regular mortgage after your home is built, so you don’t have to worry about pulling funds out for the purchase of your land or stress about all the steps that come between the start and completion of your home.

So, what is a construction loan? We get that question a lot, so we’ve put together a quick FAQ as a handy guide to all things construction loans.

What is a construction loan?

A construction loan is a short-term loan that’s used to finance the construction of your home. You roll this into a traditional mortgage once construction is complete.

How does a construction loan work?

After the construction of the home is complete, the short-term construction loan is converted into a permanent loan. This allows you to secure a lower interest rate from the get-go, without having to go through the financing process again after construction is complete.

How is it different from a traditional loan?

A construction loan is a short-term loan. Construction loans usually only exist for the term of about a year, during which construction is completed. Then it is converted into a permanent loan. Using this method allows you to lock into a lower rate at an earlier time, then keep it for the life of your mortgage. The construction loan term is only for about a year, then the permanent loan will be for a traditional term of 15 of 30 years.

How do I get the money?

When you qualify for a construction loan, you will be given the funds in increments per an agreed-upon draw schedule based on certain phases: Foundation, framing, rough-ins, cabinets, and trim, and finally when the Certificate of Occupancy is received. At these certain phases, the bank inspector will come to the home site to approve the release of the funds to Value Build at each phase.

How do I get approved for a construction loan?

At Value Build, we always recommend working with one of our Preferred Lenders to obtain your construction loan. Working with a Preferred Lender ensures there will be a quick, smooth financing and construction process. When you work with an outside bank, it will take longer to get to the construction process due to the approval process. Construction loans are considered “high risk,” which can create some hurdles you have to navigate if you do not work with a Value Build Preferred Lender. Our Preferred Lenders really focus on Construction Loans and they are experts. They can offer you the lowest possible interest rate with the least amount of work needed on your part.

Where should you start and who can help?

Everyone that builds with Value Build Homes starts by working with our Online Sales Coordinator (OSC) Team. What you will find is we do not just hand you a lender’s business card and go on your merry way. We actually have a set process in place so all your questions are answered and you always have someone to turn to if you are running into any problems. First, you will be partnered with an Online Sales Coordinator that will learn about your situation. Learning more about you will help determine the best fit for you. Our lenders have different specialties and programs. After learning more about you (Do you own land? Do you have an idea of your credit score? When are you looking to be in your new home?….) the OSC will pair you up with a preferred lender of Value Build Homes.

What is a pre-qualification letter? What does it mean?

After being matched with a Preferred Lender, the OSC will then set up a conference call between themself, you, and the Preferred Lender. During this call, introductions are made, information the OSC has gathered is passed along. After that, the OSC will leave the call so you and the Preferred Lender can continue to the confidential items required for pre-qualification. Once you’ve completed this process, the lender can issue you a pre-qualification letter to prove you are qualified for up to a certain amount and are ready to have that amount funded.

Learn more about our easy financing process by attending one of our helpful webinars or contact us for more info!


About Value Build

Value Build Homes is a custom home builder that serves North Carolina and South Carolina by providing high-quality, affordable new construction homes. We offer more than 25 different new home plans or you have the option to create your own unique configuration. With offices across North Carolina and South Carolina, we continue to deliver on our promise to never sacrifice quality for one of the most important financial investments in our homeowner’s life. For more information, Ask an Expert with our Live Chat, call 919-899-4488 or make an appointment.