Jumbo Construction Loans
Construction loans are situational loans. This means that the lender has to know the situation behind the planned
construction before they're willing to loan you money. Because it's a situational loan, it's not going to be standardized
like mortgage loans underwritten to Freddie Mac or Fannie Mae guidelines. There are however some common features
to a construction loan. Construction loans typically require interest-only payments during construction and become
due upon completion. Completion for homeowners means that the house has its certificate of occupancy.
Construction loans are usually variable-rate loans priced at a spread to the prime rate or some other short-term
interest rate. Either you, the contractor and the lender establish a draw schedule based
on stages of construction, and interest that will be charged on the amount of money disbursed to date.
In many cases, if you already own the land, then that can be considered as equity on the construction loan.
Many homeowners use construction-to-permanent financing programs where the construction loan is converted
to a mortgage loan after the certificate of occupancy is issued. The advantage is that you only
have to have one application and one closing.
Jumbo Fixed Rate Mortgages |
Jumbo Adjustable Rate Mortgages (ARMs) |
Jumbo Interest Only Mortgages
Jumbo Option ARMs |
Jumbo B/C Lending (Alternative Lending) |
Jumbo Construction Loans
