Ohio Construction Loans

Written by Michael Federico
Bookmark and Share

When a person sets out to buy a home there are a number of costs involved. Securing a mortgage loan can be difficult, and many people struggle to find a program that works for them. Building a new home can be a much harder, much more costly process. A person who wants to have a home built for them in Ohio will have to get an Ohio construction loan before anything can happen.

A construction loan is a short-term loan that is used to pay the builder. However, before a person can qualify for a construction loan he must be pre-approved for a mortgage. This pre-approval, in written form, must be given to the builder at the outset of the construction project.

What Happens When an Ohio Construction Loan is Received

When a person receives a construction loan he can pay the builder for all of the elements that will go into the house. However, certain things will occur throughout the building process to ensure that both the builder and the future resident are using the loan appropriately. An appraiser will view blue prints and property layouts to certify that the future home is worth as much as the loan. Throughout construction, the appraiser will monitor the work, making sure that the builder is proceeding according to his initial construction plan.

Most homes take anywhere from three to nine months to build. When the house is completed, the borrower will not only be responsible for the initial loan, he will also have to pay off construction interest and any administrative fees that accompanied the loan. This is why it is essential for a person to know exactly what he will owe the lender when all is said and done. Also, there are several Ohio companies that grant construction loans, so a person can check the market for the best rates before he even brings a builder on board.

Bookmark and Share