What to Know Before Building, According to Sioux Falls Mortgage Banker
New home construction is a complex process that, according to Sioux Falls mortgage banker Britt Strum, will challenge even the most patient homebuyers.
However, those willing to take on this challenge can look forward to moving into a brand-new home tailored to their specifications and preferences.
We interviewed Strum to gain insights into new home construction and to learn how she and the team at The First National Bank in Sioux Falls assist buyers in navigating this process.
According to Pigeon 605, our construction process includes a two-time loan closing; we will close on the construction loan before the work begins, and we will close on long-term, permanent financing once the house is complete.
To start the process, you will need to complete an application. Subsequently, you will need to provide three main pieces of information: a lot value/lot purchase agreement, a cost breakdown, and blueprints.
Once the loan is in place, we will receive periodic draws from your builder. Each draw can contain unlimited invoices from material suppliers and subcontractors.
Upon approval of a draw, funds are transferred to the title company, which will then send a check for each invoice along with a lien waiver to show that suppliers or subcontractors have been paid.
Lastly, an employee from the bank will perform periodic site visits to make sure materials are delivered and work is all being done according to the draws.
The construction loan requires an interest-only payment each month based on the amount drawn throughout the preceding billing period.