Rhode Island Construction Loan

Construction loans are not very easy to procure. The terms, rates and fees may differ widely. Construction loans are usually a short-term and interest only loan. Such a loan is usually replaced by a regular mortgage on completion of construction.

Construction loans are also known as story loans. That means that the lender has to know all the details behind the planned construction before they're willing to lend you money. There are some common features to a construction loan. A construction loans typically requires interest-only payments during construction and becomes due upon completion. Completion for homeowners here means that the house should have its certificate of occupancy.

Types of construction loans:
On completion of construction this type of loan is automatically reverted to a standard mortgage .The construction-only loan becomes due for payment on the completion of the construction. At this stage, it must be decided whether it is going to be paid off or replaced by a conventional mortgage. Construction loans are paid out in various stages of construction. These stages typically include:

After Grading of site and pouring the foundation.
After completion of Framing of the house.
After Plumbing and Wiring installation work has been accomplished.
After Exterior completion.
After Installation of interior surfaces.
After Installation of cabinets, fixtures and trims.
After Painting and other interior finishes and so on.

Construction loan companies differ in their lending patterns.

Loan Application
Below mentioned information is required before pursuing for a Construction Loan:-
A person who is self-employed should have the profit and loss statements along with tax returns and balance sheets for the past two years.
An employer needs to provide employer's address and phone number at the time of the loan application. Most lenders may also require recent paychecks and information on bonus, commissions and average overtime.

Personal information such as social security number of your and other co-borrowers, marital status, number and ages of dependents and current address and telephone number are mandatory for any loan application. To sum up a complete picture of your personal asset and liability information is a must. and also other sources of income such as rental property, disability payments and child support also need to be mentioned.
Details about the plot of land upon which the construction is going to take place. Complete documentation of the home building project – working, drawings along with materials and construction cost breakup.