Financing

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Understanding the process of financing can sometimes be a challenge. In an effort to assist you in finding the right loan product, our preferred lenders below are very knowledgeable on the process of new construction financing. Sebring works hard to establish good working relationships with local and national lending institutions. Our preferred lenders below will walk you through the process starting with pre-approval and will be able to explain all of the loan products and options on the market for you.

A new home construction loan is a short-term loan product that provides the funds required to build the American Dream!

The purpose of the construction loan is to cover costs including:

• The land
• The home construction 

The initial term on a construction loan generally lasts a year or more, during which time you must finish your construction project. Because construction loans work on such a short timetable and they’re dependent on the project’s progress, the lender requires a construction timeline, detailed plans and a budget.

Depending on the type of construction loan, you might be able to convert it to a traditional mortgage once the home is built. This is known as a construction-to-permanent loan. If the loan is solely for the construction phase, you might need to get a separate mortgage to pay off the construction loan.

Beyond the cost and repayment timeline, construction loans and mortgages have a few main differences:

• The funds distribution: Unlike mortgages and personal loans that provide funds in a lump-sum payment, the lender pays out the money for a construction loan in stages as work on the new home progresses. These draws tend to happen when major milestones are completed — for example, when the foundation is laid or the framing of the house begins.
• The repayments: With a mortgage, you start paying back the principal and interest right away. With construction loans, your lender will typically expect you to make interest payments only during the construction stage. Additionally, borrowers are typically only obligated to repay interest on any funds drawn to date until construction is completed.