Financing the construction of your dream home may seem like a complicated process compared to the standard home purchase or refinance of an existing home.
Until recently, two loans were required when building your dream home—one for construction and one for permanent financing. This meant that you had to pay closing costs on both loans, not to mention the extra paperwork, time and hassle involved. But with the introduction of the single-close Construction-to-Permanent Loan—combined with the ease and speed of online loan approvals—building your dream home has become easier, faster and best of all, less costly.
The term "Single-close loan" refers to one loan that covers both the construction phase and permanent home mortgage. Online lenders have made great strides in streamlining the entire loan process - from pre-approval to builder acceptance and project approval.
Once you have decided that a Construction-to-Permanent Loan is the right loan for you, you are ready to take the first step by determining the loan amount for which you qualify. For most online lenders, this is an easy process that can be done in just minutes. (Keep in mind that your lender is loaning you money based upon your dream. So they will need to see your dream as clearly as you do!)
In addition to standard credit documentation, your lender will want copies of the following to start the process:
1. Final plans and specifications (home plans). These are needed in order to obtain an appraisal.
2. Purchase contract for the lot or Settlement Statement if you have already purchased the land.
3. Construction contract. This is the agreement you have with your builder that details the project and the costs.
4. Line Item Cost Breakdown or Budget. This is generally prepared by the builder and includes a detailed breakdown of all costs.
5. Description of Materials to be used in the construction of the home. For example, wood shingle roof or lightweight tile; clear heart redwood siding or cedar shingle.
Most lenders need to verify that the builder you selected is experienced and has a proven track record to perform under the terms of the contract. IndyMac Bank, a leader in online housing lending, has a particularly streamlined builder acceptance process. In minutes, you and/or your builder can input information online and receive an immediate acceptance. (This also benefits the builder, because their contact information becomes available to other individuals looking for a builder.)
It is also important to know that, unlike a standard home purchase, funds during construction are disbursed based upon a percentage of completion.)
IndyMac borrowers have easy access to their construction loan information through a personalized, secure web site called "My Loan Information." Here, borrowers can request draws, view available funds for each item in their budget, and monitor their account billing statement.
To learn more about IndyMac Bank’s home construction loans
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=76
