A new home is the dream of many Veterans, a custom home is a great option for new home shoppers. Fortunately, there is help for Veterans that choose this path via the VA Loan benefit. We here at Security America Mortgage are expert in helping Veterans achieve their dreams of being a new home owner, below is the explanation of the process of doing a VA construction loan. If you would like to start the loan process, fill out the form below and we will be in contact with you immediately.
Construction loans are usually short term in which they only last enough time to build the home. Once the construction period ends, the lender of the construction will take their money back which will be paid by the borrower’s permanent mortgage. An inspector to monitor the progress of the house is assigned while it is being built in different phases. We will determine a market assessment of the home value at the beginning when we have the specifications from the builder. For example, if you want to build a house that costs $250,000, you will have to show the cost estimates and apply for a VA construction loan. Once the loan is approved, construction on the house starts, but the money will not be handed over to the builder just yet. The builder will provide a plan that lists phases in the construction process, the bank will reimburse the builder as each phase of the project is completed. The builder could claim the foundation represents 5 percent of the project, the inspector will verify the foundation is completed, and the bank will pay the construction company 5% of the loan.
The payments are calculated based on how much has been paid to the builder, meaning if only the foundation is done the interest will only be based on the 5% paid.
A certificate of completion will be issued by the inspector once the home is completed. The certificate indicates that the home has been fully completed and ready to be occupied. At this point you should have applied and qualified for a VA Loan, you will use your VA Loan to pay off the construction lender.
If you are interested in building your new custom house of your dreams, don’t hesitate to contact us by filling out the form below. Our Loan Officers are highly trained and experts in this field. We will help you through the entire process hassle free. We have been helping veterans get the home of their dreams for many years, you can read our testimonials here, hundreds of Veterans now are home owners, join them today. If you have any questions we are here to help, call us in the number below and a friendly representative will help you immediately, if you want to learn more about VA Loans you can also click here.