Construction Loans are usually variable-rate loans priced at a spread to the prime rate or some other short-term interest rate. You, the contractor and the lender establish a draw schedule based on stages of construction, and interest is charged on the amount of money disbursed to date. Many homeowners use construction-to-permanent financing programs where the construction loan is converted to a mortgage loan after the certificate of occupancy is issued. The advantage is that you only have to have one application and one closing. Another variable in construction loans is how much of the project cost the lender is willing to lend. During the construction period, interest is charged only on the funds that have been disbursed. When the project is completed, the permanent loan period begins.Typically a Collins Custom Builders client will have a minimum of 15% to 25% or more in equity position with their project and the lending institute often will require no down payment!

Permanent Loans replace the construction loan once the project is complete and a certificate of occupancy is issued by the building department. Your loan now becomes the same as a typical mortgage loan. There are many options available for your permanent loan and these options should be discussed with you lending institute.

Lot or Land Loans are not always necessary. With proper coordination during your construction loan process the land can be included in the construction loan, thereby avoiding a separate land or lot loan. And yes, your land can included in your construction loan and does not have to be bought or owned outright!

Collins Custom Builders works with virtually all lending institutes and banks in Northern Colorado. If you are in need of high quality local construction and/or permanent loan financing we highly recommend working with:

For financing information, free pre-approval and discounted loan fees, please contact Tony McCune at New West Bank at tmccune@newwestbank.biz or by phone at 970-378-1800.