Construction to Permanent Loans

There are two phases to a construction to permanent loan. The first is the construction loan phase, which is in effect while your home is being constructed. During this time, we will make periodic disbursements of loan principal based on the amount of construction completed, and interest-only payments will be due on the amount disbursed. Upon completion of your home, and satisfaction of the conditions outlined in your loan documents, the loan will roll into the permanent phase. The term of your Construction to Permanent loan will be based on the permanent loan product you select. The construction phase is typically twelve (12) months followed the fully amortized permanent stage.

 The first step is to get a loan pre-qualified from us. This will help with understanding how much house is affordable. A pre-qualification will also be valuable when it comes to meeting with Galiant Homes as you design your home.  Once you are qualified and the plans and the budget are completed, we will order what is called an “as built” appraisal which will provide a value of the home as if it were complete today. Various documents will be requested by the Construction Banker. The quicker the documents are submitted, the quicker the process will be. Additional documentation may be required depending on the specific loan requirements. A closing date is scheduled! We will work with a title company who will provide final construction/ mortgage documents. Then you move in and we celebrate!

Loan Types

Single Close and Two-Time Close construction loans. For your mortgage loan we offer VA, FHA, Conventional, Jumbo, Reverse Mortgages and More. Each loan can be set up using either fixed or adjustable rates mortgage (ARM) and offer a choice of terms.

Single Close Construction Mortgage

  • One-time loan closing
  • 12 month interest-only construction draw
  • Mortgage loan is a portfolio 5, 7, or 10 year ARM OR 15 or 30 -year fixed rate.
  • 80% LTV up to $600,000
  • Reduced LTV on Jumbo loans

Two-Time Close “Standard” Construction Loan

  • 12 month interest-only construction draw
  • Permanent mortgage taken-out upon construction completion (second closing)
  • Up to 90% LTV with mortgage loan pre-qualification/pre-approval

Most construction loans must meet the following:

  • Single-family detached home
  • Primary residence or second home
  • Property must be located in select counties in Colorado, Kansas, Missouri, New Mexico or Utah

Things to Remember During the Construction Process

Below are some things you’ll need to avoid while going through the construction loan process. If you need to do any of the following, please talk with your Construction Banker.
• Change jobs or become self-employed.
• Buy or lease a new vehicle.
• Make large purchases on your credit card or fall behind of your payments.
• Spend money you have saved for a down payment.
• New inquiries on your credit report.
• Make large deposits into your bank account unless you can provide documentation. You will be required to document each large deposit which is not payroll related.
• Change bank accounts.
• Co-sign for anyone.
• Make large purchases unless clearing it with your Banker first (this includes buying furniture for your new house).

Information provided by Community Banks of Colorado

If you need more information on Construction Loans, call us – we will walk you through the entire process.