Construction Loan Near You – Start Building Your Dream Home in Utah

Begin erecting a new house or carrying out much-needed renovations with a construction loan through Summit Home Loans. We deliver exactly what everyone wants from their financing experience – lower prices and convenience. Our customers get wholesale rates and fewer out-of-pocket costs when closing. You’ll also get the fast, simple process necessary to focus on the work ahead. Discover an easier and more affordable option for construction loans in Utah by calling us today.

How Do Construction Loans Work?

The search for the perfect residence to raise a family or live out your golden years has gotten harder over the years. Rising costs and more people choosing to stay locked into lower mortgage rates rather than sell mean there is less supply for ideal properties. An attractive solution for more and more people is finding a lot to build something new on and personalizing it as desired.

Customize to your exact needs, including style and layout.
Build using up-to-date materials for enhanced energy efficiency and modern aesthetics.
Skip the hassles of bidding in a competitive real estate market.
Choose the location.
Enjoy potentially higher resale value.
New buildings require fewer repairs and lower maintenance costs.

Pros: The money can be used to construct the house from the ground up, including buying the land, materials, and labor. Funds get disbursed in stages as the work progresses, ensuring everything is paid for as work moves along.

Cons: There can be some potential cons to this financing choice. The interest rates are typically higher because it is a short-term agreement. Expect higher monthly payments than with a traditional mortgage. A higher down payment is also usually required.

The typical way this option works is that funds get released in stages. It covers a range of costs including the land itself, materials, and physical labor. There are two primary types of construction loans, both requiring different considerations about risk tolerance, financial situation, and long-term goals:

Construction-Only

People may choose this route for various reasons, including wanting more flexibility when negotiating a mortgage later. Rates could drop or improve by the time the house is completed, or their credit score could go up.

Key characteristics include:

Usually short-term (6 to 12 or 12 to 18 months)
Buyers typically only pay the interest as funds are disbursed
After completion, customers must refinance into a traditional mortgage to finish paying
The risks associated are the two closing fees and that you’ll have to qualify for the mortgage after the house is finished. We can make this easier by eliminating or reducing many of the charges involved.

The potential downside of this alternative is that there are stricter requirements. These could include aspects related to credit, income, and project details. Customers should be confident in their financial stability in the coming years.

Construction-To-Permanent

It’s sometimes in people’s best interest to streamline the process with a bundled financing option. This makes sense when people want to lock in a lower interest rate and pay less over time. It’s also a great choice if they simply desire more predictability and convenience.

This is also the best option when purchasing a property that needs a significant amount of renovating. Bundling covers sales price and renovations with a one-time close price. The rates are based on the home’s value once all the work is completed. A key benefit is that it opens a wider range of homes for sale, including those listed “as-is” or in a desired location but requiring some work.

Key characteristics that could be beneficial to you include:

Building and a mortgage loan bundled into one package
Up-front approval
The loan automatically converts upon completion of the house
One closing cost

What Type of Construction Loan Is Right?

Find a construction loan near you that best fits your financial situation and long-term goals. There are varying approval requirements and other considerations that the purchaser and the lender must evaluate before moving forward. At a minimum, the following will be required:

Detailed building plans
A fixed schedule
A budget and estimates
A builder who is licensed and approved by the lender
Credit score and income verification
Down payment (typically 20%)

These requirements must fit into the broader financing strategy, such as how funds get distributed and how risks will be managed. Additionally, it’s important to consider how land and builder qualifications factor into getting approval.

Disbursement Schedule

The payment process is administered through “draws” according to the stages of construction. The building plans include milestones, which, when met, allow for more money to be disbursed to fund the next phase. The lender inspects progress and determines when milestones are met while you pay the interest on each draw.

Risk Management

Consider the possibility of delays or rising material costs. Lumber, steel, labor, and other expenses could fluctuate during the months of building. There is the possibility that funds may need to be reapplied. Our team develops strategies and contingencies to handle this issue.

Land Ownership

Owning the land beforehand could be beneficial. The value of the land may be able to count toward the down payment or be used as leverage for better terms. Otherwise, a separate loan to purchase the lot may be necessary.

Contractor Requirements

DIY is possible, but it could make it difficult to qualify if you lack experience and guarantees. Lenders want to know that the builder can follow through on a plan and all established milestones. Hiring a licensed general contractor with a strong reputation is the best way to speed up the process.

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Get What You Need To Build What You’ve Envisioned

Future homeowners searching for a construction loan “near me” should be prepared for all that comes with it. There will be more to repay after the house is built, potentially increasing long-term debt. However, it’s hard to put a price on a custom home in a preferred location.

People should understand exactly how much money is necessary to make an informed decision and bring their dream home to reality. Underestimating will lead to delays and more paperwork. Overestimating will result in a higher interest rate to repay.

Work with our experienced staff to uncover a detailed, realistic estimate that you can budget into your plans. Borrow what is needed and nothing else while also getting a sufficient cushion to handle potential hiccups along the way. There is a balancing act to pulling this off effectively. Our knowledge will be beneficial throughout the entire process.

The Costs That Are Often Overlooked

Unless you’re a professional homebuilder yourself, you’ll likely need a trusted source to get a full view of the process and price. The last thing you want to happen is to design something that unexpectedly goes beyond the set budget.

Aspects that need to be considered include:

The Lot: Do you already own the ground the building will occupy? If so, it’s a great start. A lot loan is a different kind of financing that may be necessary if not, which increases costs and paperwork.
Labor and Contractors: Companies and contractors charge a wide range of fees. Labor alone can range from $20 to $150 per hour. The businesses that charge more typically have excellent track records for delivering on time and to specifications, but this is not set in stone. Do your due diligence when choosing someone to develop your project. We can shed some light on specific companies we’ve operated with in the past.
Major Systems: Multiple bathrooms, solar arrays, home theaters, custom HVAC – all of those advanced features you plan to incorporate require major systems to be installed. The area the house is built may also require special considerations about plumbing and electrical systems.
Landscaping and Paving: Patios, lawns, driveways, and other external finishes are not always included in the loan. These features can sometimes be considered cosmetic by lenders and left to the homeowners to fund on their own. However, these nice-to-haves can also be essential, especially if they are part of essential functions like grading, drainage, and erosion control. People may want to look for financing that includes them if there isn’t money set aside to handle it after the fact.

Getting Help: A Range of Options for Financing

Turn a vision into reality with assistance for all kinds of buyers and specific circumstances. Anyone looking online for a construction loan “near me” will be bombarded with advertisements about first-time homebuyer assistance, veterans organizations, and more. There are several real and practical programs available that could be worth looking into.

FHA One-Time Close: The Federal Housing Administration offers low down payments (as low as 3.5%) and streamlined approval for construction-to-permanent financing. This option is excellent for people with limited savings and low-to-moderate income.
Veterans Affairs: Qualified veterans and active-duty service members can get help from the VA. There are excellent benefits associated with this route, including no down payment and favorable terms. One stipulation is that builders and lenders must be approved by the VA.
USDA: The United States Department of Agriculture promotes residency in rural areas by offering zero-cost down payments. Eligibility is limited to people who meet income limits and other guidelines.
State and Local Housing Agencies: Utah offers its own assistance, typically to first-time buyers and low-income applicants. Some cities also have incentives. We can walk you through all the available options in the locations you’re considering.
Nonprofits and Community Development Programs: Many nonprofits, like Habitat for Humanity, provide help through labor, land grants, and subsidized loans. Community Development Financial Institutions (CDFIs) offer construction loan guidance.

Some of these programs don’t offer construction loans specifically, but their assistance can help reduce the overall costs when used in conjunction with one. Visit their websites to get specific information. Additionally, our staff can discuss available options and point you in the right direction.

We Make the Process Simple and More Affordable

Are you ready to start your journey to obtaining a home that’s truly your own? Our residential mortgage brokerage takes pride in providing customers with superior service and prices. We understand there is a lot of confusion when it comes to evaluating and securing a construction loan in your area, but our experience and knowledge can help you make informed decisions.

Access competitive rates that enhance the value of your investment and make building a new house more attainable. Finalize a short-term loan with us and receive wholesale rates with fewer closings, saving you money. Some of the benefits we offer include:

180-Day Lock Option: We aim to ensure more predictability and stability throughout the terms of an agreement. Lock in an interest rate for 6 months while building to minimize the impact of potential increases.
No Origination, Processing, or Underwriting Fees: We eliminate many of the added costs that other companies sneak in to take more of your money. Our clients can save thousands of dollars upfront. Get a more affordable process that lets you put more into your dream residence.

Take advantage of our convenient process to achieve a better financing deal. Lower upfront costs empower customers to get results that better match their vision and needs. Our priority is to ensure rate stability and transparency. Knowing what you’re getting into eliminates surprises and potential delays.

Start Building Now – Contact Us for a Better Construction Loan

We’re one of the top providers of construction loans in Utah, offering a simplified process and better prices than typically found in the local market. From St. George to the Wasatch Front and beyond, we have a solution that fits your particular financial needs and vision. Get locked-in rates and fewer upfront fees for a more affordable and stable experience. Do you have questions about the procedure or if this is a practical solution for building your dream home? Contact Summit Home Loans today about a construction loan near you and get the information necessary to make the best decisions. 801-855-8535.

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