Home construction loan mortgages

Home construction loan mortgages are mortgages provided by a bank to a lender for the purpose of a new construction project. These loans are considered based on several factors.

Factors considered by the bank:

1.       What is the applicant's credit like?

2.       What assets does the applicant have?

3.       What liabilities does the applicant have?

4.       What is the construction project?

5.       Who is the construction company?

These loans are paid to the construction company in installments and typically require an inspection before each additional payment to assure that the work is being done as specified.

The three major types of construction loan mortgages:

1.     One time construction loans

2.     Note modification construction loans

3.     Two-time close Construction loan mortgages

The primary difference between these three different types of construction loan mortgages is there terms of financing and whether the loan continues after the construction phase and how the rates are affected during the construction and final mortgage stages.