Everything That You Need to Know about Construction Home Loans in Cauayan, Isabela
Amidst the high and lows if you miss the four walls that you can actually call your own, construction home loans can make it up for you. You can’t have a property of your own with the help of traditional mortgage now-a-days. The steps of obtaining a construction loan is a bit difficult than the traditional mortgage.
Getting construction loan in Cauayan, Isabela
In case of buying a property in Cauayan, Isabela, you pay some money as down payment to the bank and the property is taken as collateral security. But this is not possible in case of construction of loan there is no property that can be taken as collateral. In such loans, your banking history matters.
The requirement depends from lender to lender. In some cases, the first step for getting the funds is to present the project’s story for the construction of house. This report shows the budgetary estimates, the timetable in which the project will be completed and payment process.
After the request for loan is approved, you’ll not be paid the whole amount in a time but in a form of bank draft. The draft will be drawn as per the project timetable. There will also be a representative of the lender to ensure that the construction of house is as planned.
The term of the loan is originally one year which means the construction of your home should be reasonably completed within a year.
After the construction is completed and lien are signed by the contractors and the certificate of occupancy is received, the construction loan from hereby acts as a traditional mortgage loan.
Important information that you should know
Construction loans are not a common type of loans and they form a very low percentage of mortgages. As these loans include a higher risk than the traditional mortgage, it is seen that lenders don’t usually cover the full amount of loan. They usually lend up to 80% of the total amount. The remaining amount is to be adjusted by the borrower itself. Know this before getting into a construction loan in . Cauayan, Isabela