Any improvements to your home can be exciting. Whether you’re renovating your existing St. Louis home or adding on, the process can be exhilarating. But when you’re looking for a loan to cover the cost, take a look at construction loans and all they can offer for the benefit of your St. Louis home. With the help of USA Mortgage, we’ll simplify this part of the process by finding you the best rates and options for your budget. From there, we’ll make sure the process of getting your funds is taken care of until it is in your hands. Don’t wait any longer, get started today and take the next step toward your dream home.
St. Louis Construction Loans
What is a Construction Loan?
A construction loan is made to cover the costs of a renovation, addition, or the construction of a new home. These loans are specifically used to pay the contractors as construction progresses. With construction loans you can expect higher interest rates and shorter terms (usually a period of one year). Once the construction or renovations are complete, you’ll have a few options to pay off the construction loan. You can refinance it into a permanent mortgage, or obtain a new loan (sometimes known as an end loan) to pay off the previous.
Eligibility for a construction loan is different from your traditional mortgage loan. Since collateral is not always available, a 20% – 30% down payment is typically required. Also, ensure that your debt-to-income ratio is no more than 45% of your income. You should also have a credit score of 680 or higher. It could be possible to obtain this loan with a lower score but your best chances of qualifying for this mortgage starts with a 680 credit score. Finally, let your lender know if you’ll pay the balance in cash or refinance upon completion. There is a good chance they will ask you this.
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At USA Mortgage, we’re here to help make your possibilities a reality. You have your dreams about how you want your home to look and we’re here to make the process that much easier. Let us help you get started. With the best rates and options we can provide you, you’ll be one step closer to the home of your dreams. Apply today and let’s get started.