Step 3: Using your loan
Making your dream a reality
During construction, the approved interim construction loan funds are advanced in amounts proportionate with the percentage of completion of each phase of construction.
First National conducts inspections of the building site on a monthly basis. This lets you use your loan to make payments to your suppliers and take advantage of any available discounts.
Remember to establish credit accounts with your suppliers. Funds may be disbursed directly to the subcontractors or suppliers to ensure payment is made for services rendered.
Upon completion, a final “As Built” survey and final building inspection must be done. The appraiser must do a final inspection to recertify its value and confirm that the improvements have been constructed in a “good, workmanlike manner” per plans and specifications.
A “Notice of Completion” document must be recorded at this time. This will establish a 15-day lien period, during which unpaid contractors and laborers may file claims of lien. Once the lien period has expired, your long-term mortgage may be closed, thus paying off your interim construction loan.
Your expected completion date is critical. If a delay occurs, the permanent financing may become unavailable at the rate you anticipated. It is important to finalize your long-term financing 45-60 days from completion.
If you’re confident you can meet these requirements, please review and complete the required forms. You’re ready to meet with one of our Owner-Builder loan experts.
Step 4:The forms you need to meet with one of our owner/builder experts.