FINANCING YOUR CONSTRUCTION NEEDS
Depending upon the size of your construction or remodeling project, most require some type of financing ability to enable completion of the project. Unless you have cash on hand, or some other means, financing is an important component to your project list.
Construction Loans
New construction loans are required for any type structural building. These loans are quite different than loans for purchasing or refinancing an existing home. Most construction loans are short term loans, and are usually no more than 12 to 18 months in duration depending upon the time table for construction. Construction lenders also need to ensure that once the project is completed that you also have permanent financing in place to pay-off the construction loan. This permanent financing is what most people are familiar with as they are the same loans needed to purchase or refinance an existing home. Below are common requirements and features for new construction financing:
Construction Lenders require sufficient equity in the land. Most lenders require the land free and clear of any liens, or to meet specific Loan-to Cost requirements.
Most construction lending in today’s environment require a maximum Loan- to- Cost Ratio
( LTC ) of 65%. This means that the total cost to build does not exceed 65% of the total value of the property, including the land, once the structure is complete.
Plans, permits, and final plan check by your local building department must be reviewed by the construction lender.
Lenders will require an independent appraisal, normally done by them, to ensure that once built that the LTC ratio is met or exceeded.
Lenders will need a resume for your builder with proof of license, insurance, and bonding.
Lenders will also require a detailed cost of construction detail listing materials and labor needed to complete the project, along with estimated draw requirements to complete the project.
Finally, your construction lender must have evidence that once completed that you have permanent financing in place to pay off the construction loan.
In cases where you have an existing structure that you want to remodel, you can secure normal financing if needed through the refinancing of your home. You lender will need information from your builder to determine cost to construct to help them in determining your final loan needs.
In both type of loan scenarios, ThorDBD, Inc. can help you. Our other company, Thor Funding & Investments, Inc. ( CA DEPT of REAL ESTATE, CORP. LIC. # 01848367 ) can assist you in securing either new construction financing or permanent financing. My father, Wayne L. Brown, heads this sister-company, and has more than 35 years experience in real estate financing which includes commercial and construction financing.
Regardless of your financing requirements, we are confident that we can assist you in meeting your building and financing needs to ensure your project is a success.
Financing
Wayne L. Brown President/C.F.O
Thor Funding & Investments, Inc.
CA DEPT of REAL ESTATE, CORP. LIC. # 01848367
Corp. MLS#344184
Direct#--1-858-997-6300
Call Today 858-997-6300
Copyright 2011 Thor Design Building & Development, Inc.: San Diego General Contractor. All Rights Reserved.
(619) 638-2309 | daveb@thordbd.com
We Service the San Diego and Surround Areas. These areas include: La Jolla, Del Mar, Ranch Santa Fe, Solana Beach, Encinitas, Carlsbad, San Marcos, Fallbrook, Rancho Bernardo, Poway, Scripps Ranch, Fairbanks Ranch, El Cajon, Point Loma, and Coronado
