Construction Loans

Construction loans are a short-term, interim loan to pay for the building of a real state property. As work progresses, the lender pays out the money in stages.

If you’re planning to build a new home or renovate an existing property, you may need a construction loan to finance your project. At Intercontinental Ultimate Solutions, we can help you navigate the construction loan process and find the right financing solution for your needs.

What is a construction loan?

A construction loan is a short-term mortgage used to finance the construction or renovation of a property. These loans are typically offered by banks, credit unions, and other financial institutions, and come with unique eligibility requirements and terms compared to traditional mortgages.

How do construction loans work?

Construction loans are typically structured as interest-only loans, meaning you only pay interest on the funds you borrow during the construction phase of your project. The loan has a maximum term of one year and variable interest rates that move up and down with the prime rate.

The lender will review several factors when determining your eligibility for a construction loan, including:

  • Construction plans and budget
  • Property value and cash flow
  • Borrower creditworthiness and financial history
  • Down payment and equity

Once your project is complete, you will need to refinance the construction loan into a traditional mortgage, or pay off the loan with cash.

Benefits of a construction loan

Construction loans offer several benefits over other financing options, including:

  • Customized financing: Construction loans allow you to customize your financing to meet the unique needs of your project, whether you’re building a new structure or renovating an existing one.
  • Flexibility: With a construction loan, you only pay interest on the funds you borrow during the construction phase of your project, giving you flexibility and control over your project’s timeline and budget.
  • Interest rates: While the rates on this type of loan are higher than rates on permanent mortgage loans, construction loans typically come with lower interest rates compared to other types of financing, such as credit cards or personal loans.

Is a construction loan right for you?

If you’re planning to build a new home or renovate an existing property, a construction loan may be the right financing option for you. However, it’s important to work with a knowledgeable mortgage broker who can help you navigate the loan process and find the best terms for your unique situation.

At Intercontinental Ultimate Solutions, we have years of experience helping clients obtain construction loans and can help you secure the right financing for your project. Contact us today to learn more about construction loans and how we can help you achieve your construction goals.

Additional restrictions may apply. Please inquire. All loans are subject to credit approval.