Making Even the Most Complicated Visions Attainable.
Like our ability to bring our clients’ dreams to reality, Platinum Development also has the flexibility to put even the most complicated visions within reach. Our thorough review of your building project can enable us to make recommendations that can save you time and money.
Below, we’ve provided a brief introduction to the common financing considerations when building a custom home. As a courtesy, we’ve also provided links to some lenders that our clients have worked with in the past.
Rest assured, we’re infinitely flexible. No matter whom you choose to finance your new home, we’ll work with you and your lender to make it a reality...
In most instances, a custom home is financed through a construction loan.
What is a construction loan and how does it work?
A construction loan is based on the home’s projected “completed value.” A lender typically requires information on the property, such as a parcel id#, some type of survey, and information pertaining to the proposed home, such as plans and specs, so that an appraisal can be done, and the home’s completed value estimated. The lender will then determine the loan’s maximum amount based on this appraisal, and other factors, such as income, debts, down payment amount, etc.
A construction loan operates on draws, meaning after a certain amount of work has been done, the builder submits a draw request to the lender. In most instances, the lender will verify that the work has in fact been done (a site inspection), and the title company verifies no liens have been placed on the property before approving release of the funds for that draw. One average, we submit 5 or 6 draw requests per home.
Upon completion of the project, generally after we’ve obtained the Certificate of Occupancy, the construction loan is either, depending on the lender:
- rolled-into the permanent loan, or
- paid-off at the end loan’s closing
Who obtains the financing?
Generally, our clients procure their own financing. Thus, we work with any lender a customer chooses. Some of the local lenders which have financed projects for our clients are:
In the event a client has not procured financing, we are able to offer financing. We employ the financing experts at Stock Financial Services. Their many programs, competitive rates, and partnership with Wells Fargo Home Mortgage make them an attractive financing source for new home construction.
Their Builder Best(SM) program enables locking-in a permanent end loan interest rate for up to 360 days. Fluctuating rates can cause a lot of stress for clients during the construction process, and this program eliminates that concern. If rates fall before the end loan is closed, the rate can be floated down, and if rates rise, the rate has already been locked-in.
We find Stock’s professionals great to work with, their loan process easy to navigate, and their loan costs (no draw fees) very low in comparison with other local lenders. They specialize in construction lending, which makes them an ideal source for new home construction.