Custom construction financing is a bit more complex than a standard mortgage. In order to get an appraisal or to close on a loan you will need to have all of your paperwork in order.
The following is an excerpt from the fourth chapter of our eBook, WaFed - Custom Construction Ebook
We hope that you find this information useful in helping you to gather all of the information and paperwork you will need to build your dream home. If you find this useful, please WaFed - Custom Construction Ebook to learn more about the custom construction process.
Submit your plans and specifications.
The bank requires an appraisal in order to determine the exact value of the house and everything needed for the construction process. Finalized plans, cost breakdowns, and material specifications are required for this step. The total loan amount is then finalized. The appraisal value is key
to determining the final loan amount. The bank won’t lend more than a certain percentage of the home’s completed value, usually up to 80% of the appraised value or actual the cost of construction, whichever is less.
Here is the information your lender will need to order a professional third-party appraisal based on your house plans:
Includes foundation plan, floor plan and elevations. These will need to be signed and dated.
Includes lot dimensions, setbacks, easements, adjoining roads, location of house, location of garage and, if applicable, location of septic system and well.
Specifications & Materials
A detailed list of your materials and specifications. These will need to be signed and dated.
Every cost associated with the build.
Fixed-Price Construction Contract
Includes state sales tax, builders profit and overhead. Should match the cost breakdown exactly. These will need to be signed and dated.