Murray Lampert Design, Build, Remodel: Homeowner's Guide to Construction Loans

License #458038

SAN DIEGO, Nov. 27, 2024 /PRNewswire/ -- If you are about to embark on a major home remodeling project or custom build, we created this guide to help you navigate through the process of securing a construction loan. This guide explains what you need to provide to the lender, our role in the process, and what to expect.

There are many things to consider when choosing a design – build firm to partner with. They include:

• How long they have been in business
• Experience with the construction loan process and familiarity with the loan officer
• Financial stability and being pre-approved by lenders
• Construction loan experience
• Having in-house architectural, interior design and project management in order to provide the required documentation to the lender
• Being able to submit, track and pull the building permits efficiently
• Understanding the fund control and inspection process
• Cash flow to operate with draws controlled by the bank and the required retention

        1. Initial Planning:

• • Define Your Project: Work with us to finalize your project's scope, design, and budget.
  • Introductory Call: Schedule a call with the lender and the design – build firm to make sure everyone is on the same page.
  • Pre-Approval: We provide an initial recap with scope of work and budget. This is a valuable document to use when you meet with your lender to get pre-approved for a construction loan.

       2. Loan Application:

• • Submit Your Documents: Provide the lender with necessary financial documents (income statements, credit reports, etc.) and project details (plans, specifications, and a detailed budget). As the design – build firm, the plans, specifications and budget are part of our service.
  • Appraisal: The lender will arrange for an appraisal of the project's potential value once completed.

       3. Loan Approval:

• • Loan Approval: After reviewing your application and the appraisal, the lender will approve the loan and outline the terms.
  • Draw Schedule: A payment schedule (draw schedule) will be established, dictating when funds will be released during construction. There will be a specified number of draws included in the loan. An experienced and reputable design – build firm will be not try to pre-bill or request more draws than what it included. 

        4. Construction Phase:

• • Draw Requests: As construction progresses, we'll submit draw requests through the approved fund control. These draws are typically tied to milestones and/or city inspections.
  • Bank Inspections: The lender will require regular inspections through the contracted fund control to ensure that work is completed before releasing funds.

        5. Project Completion:

• • Final Inspection: Upon completion, the lender will conduct a final inspection to ensure all work meets the agreed-upon plans and is complete.
  • Loan Conversion: The construction loan typically converts to a permanent mortgage once the project is finished. The design – build firm should be in consistent communication with you on the timing of occupancy to comply with the terms of the construction loan.

       1. What Your Lender Needs to secure a construction loan:

• Personal Financial Information: Proof of income, credit score, assets, and liabilities.
• Project Documentation: Detailed plans, specifications, and a comprehensive budget including finishes.
• Builder's Information: Our company's licensing, insurance details, and references.
• Appraisal: An independent appraisal of the completed project's value.

       2. Our Role in the Process
We are committed to making the construction process as smooth as possible. Our involvement includes:

• Providing Detailed Project Information: We will supply you with all necessary plans, engineering, specifications, and budget details required by your lender.
• Coordinating Draw Requests: We will manage the submission of draw requests to your lender, ensuring that funds are released on schedule.
• Communication with the Lender: We will communicate with your lender as needed to facilitate the construction process, including handling any required inspections.

      3. Setting Boundaries: What We Don't Do
While we are here to support you through this process, there are certain aspects we do not handle and we are at arms length:

• Loan Application and Approval: We do not assist with filling out loan applications or securing loan approval. This is handled directly between you and your lender.
• Personal Financial Documentation: We are not involved in providing or reviewing your personal financial documents required by the lender.
• Appraisal and Inspections Coordination: Although we can accommodate lender inspections, scheduling and coordinating appraisals and inspections are your responsibilities.
• Loan Terms and Negotiations: We do not negotiate loan terms or advise on financial matters related to the loan.

Securing a construction loan can be complex, but with the right information and an experienced design – build firm to support you, it's a manageable process. We are here to assist with all aspects of your project's design and construction, ensuring a smooth experience from start to finish. Please don't hesitate to reach out with any questions or for further clarification on our role in this process.

Learn more about Murray Lampert's Process; https://murraylampert.com/our-process/?utm_source=PR+Newswire+&utm_id=Construction+Loan+PR+Newspress 

Learn more about our recommended loan officer, Leif Tollefson; https://mortgage.usbank.com/ca-san-diego-leif-tollefson?utm_source=PR+Newswire+&utm_id=Leif+Tollefson+Information

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SOURCE Murray Lampert Design, Build, Remodel