Posted by jeff on November 11, 2002 at 17:59:41:
your right about learning something new everyday, especially around this site.
as i stated before, i have never dealt with a contrustion loan but everythign ive ever heard abuot them was for new construction. atleast now i know a new option though. ill have to check into that once i find the occasion for it.
Construction Loans - Posted by Eva_VA
Posted by Eva_VA on November 09, 2002 at 23:42:43:
I was under the impression that to get funding for a rehab project, hard money lenders or subprime lenders were sources to use. I was recently told that I can get a construction loan for a year with interest only payments. Do any of you guys get this type of loan for your rehab projects? If so, is it a better way to finance your deal? Any input would be greatly appreciated. :o)
Re: Construction Loans - Posted by Bill (SoutheastTX)
Posted by Bill (SoutheastTX) on November 10, 2002 at 06:26:17:
I’m sure policy varies with lenders, but I recently financed a REO purchase (not with owner bank)with a local community bank. Actually did separate purchase and construction loans then rolled them into single loan after renovation completed. Funded construction based on periodic draws. Paid interest-only during construction. Loaned 95% of total at current low interest rates for 30yrs. Did have to pay some additional closing costs. May be worth checking with smaller local banks…often more flexible.
Re: Construction Loans - Posted by jeff
Posted by jeff on November 10, 2002 at 05:08:47:
construction loans are for new contruction to the best of my knowledge. if your not building a new house from scratch, i dont belive this will help you any.
Re: Construction Loans - Posted by Vlad
Posted by Vlad on November 10, 2002 at 15:46:21:
Bill,
you got a construction loan after you acquired the property, i.e. you were the owner at the time you were getting this loan, correct?
Re: Construction Loans - Posted by Eva_VA
Posted by Eva_VA on November 11, 2002 at 17:17:07:
Jeff,
I was under the same impression you are. My realtor is the one who enlightened me about this type of loan. Learn something new every day. :o)
Not necessarily - Posted by Stew(NE)
Posted by Stew(NE) on November 10, 2002 at 21:03:21:
Think about it from the banks view. A loan is a loan is a loan. What is the difference between a loan you call for a car and house. Collateral. They can call a loan whatever they want. I purchased a second on a foreclosed property. I then went to a mortgage broker and said I needed the money to buy the first at the auction. (It was also a good business deal from the banks view) He said," I know a bank in town that would do that" They looked at the deal and said we will give you the money for the loan and since you need some fix-up money and you should have it sold in 3 to 4 months, we will call it a construction loan. So that taught me to not worry about finding the money, find the deal and the money will follow, whatever they want to call it.
Richmond John Marshall Justice, Graduate 1975