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When you work with Blake and his company, you are working with the best of the best of the best!  — Charles Hackney

Construction Loans

A renovation/addition project can be a good candidate for a construction loan.  If your budget is larger than the cash you have on hand or are willing to part with, you can finance your renovation through a construction loan just like building a new home from the ground up.  The construction loan amount will be based on an appraisal of what your home will be worth after the project is complete.

Here are the basics to how the process works:

1 The construction loan pays off your current mortgage

2 The construction loan is a temporary interest only loan during the project

3 Draws are taken out throughout the process to pay the builder’s invoices

4 When the project is complete, the final amount is rolled into a permanent mortgage product of your choice.

 

Now here are a few tips to make this process easier:

Tip 1: Use a Local Bank

Tip 2: Use a Bank that your builder has worked with before

Tip3: First have a basic schematic and description of the finishes for the Appraiser

 

There are few additional steps that each bank will require for their individual processes, but this basic outline should prepare you for how the process works and will hopefully give some of you an additional tool for your upcoming projects.



© 2011 Innovative Renovation, LLC. All rights reserved.
801 Gillbert Street, Suit 101Durham, NC 27701(919) 943-6214