Loan Basics
We look at your company's total picture in making our loan decision and these include:
• The type of project
• Projected Income and Expense
• Other Assets
• Prior construction experience
Construction Loan Pre-approval
We are one of the few lenders who will give you a written "pre-approval" loan commitment so that you can look for and purchase a property knowing that your loan will be there at closing. This also helps you to negotiate a better purchase price as your seller will know that you are qualified and can close quickly.
Loan Payments
Our loans are short term and there is no monthly "mortgage" payment in the traditional sense but rather an interest payment only with the full balance then due at the end of the loan. Many times we will even deduct the interest from the loan amount so that the contractor does not have to worry about monthly payments and can spend time on construction not finance.
Mortgage Insurance
Occasionally we require Private Mortgage Insurance (PMI) from a borrower as a way to insure us in the event your company is unable to repay the loan.
Loan and Completion Costs
There are several common loan completion (also known as closing) costs and these vary by project and loan type. In most situations these include:
• Agreed Prepaid Costs are costs paid in advance and include such things as pre-paid interest and deposits to set up escrow accounts for taxes, inspections, documention and other matters.
• Our Lender fees which are our expenses related to making the loan which cover but are not limited to origination and other loan points.
• Review and Approval fees which are fees for processing, credit reports, title work, and appraisals.
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