Construction loan procedures
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Construction loan procedures

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Published by United States Savings and Loan League in Chicago, Ill .
Written in English

Subjects:

  • House construction -- Handbooks, manuals, etc.

Book details:

Edition Notes

Statement[compiled by Bernard O"Neill].
ContributionsO"Neill, Bernard., United States Savings and Loan League.
The Physical Object
Pagination48 p. ;
Number of Pages48
ID Numbers
Open LibraryOL14089063M

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  Construction lending requires a high degree of diligence to mitigate its inherent risks. One small but often neglected aspect of construction lending is the draw process. Construction lenders do not typically disburse the entire amount of a construction loan at the time of the loan closing or on the date the project starts. A Solution to Ease Construction Loan Pain. By Baker Hill on Construction lending software is meant to make the draw management process for administering construction loans as easy as it should be: collaborative, low-risk, fast and profitable. Read post.   A construction loan draw schedule is a detailed payment plan for the construction project. These are typically split up into various milestones or phases of the overall project. With a draw schedule in place, an owner or project manager will submit a detailed report of the work completed at certain points in the project.   Construction-to-permanent, or C2P, loans. Also called a one-step or single-close loan, a C2P loan automatically converts to a standard mortgage when construction is finished. The lender may call this conversion a modification or refinance, but the borrower does not have to go through the loan application process all over again.

The construction loan of the past was a short term 1 year loan that the customer would have to refinance into a new loan once the construction was completed. This two time process cost the customer two sets of closing costs and you would have to re-qualify for the new loan .   Construction-to-permanent loans: These loans are good if you have definite construction plans and timelines in place. In this case, the bank pays the . Obtaining a Mortgage. If you have a standard construction loan, you can convert it to a standard residential mortgage by applying with the same or another lender before your home is complete. Construction loans are short-term, interim loans used for new home construction. The contractor receives disbursements as work progresses. Contact a dedicated, experienced U.S. Bank loan officer to learn more about construction loans and to discuss current construction loan rates.

Identify the six general types of construction loans; Identify the additional risks, considerations, and review needed with construction loans; Explain the steps in determining the proper administration of a construction loan based on approval conditions, the commitment letter, and loan policies and procedures.   Construction in progress is an asset to a business. CIP accounting differs based on whether the asset is being built for use or for sale. If construction is accounted for incorrectly, CIP can distort the financial statements, overstating revenue or masking items that should be expensed.   One Step Loans: with a one-step construction loan, you are selecting the same lender for both the construction loan and the mortgage, and you fill out all the paperwork for both loans at the same time and when you close on one a one-step loan, you are in effect closing on the construction loan and the permanent loan. I used to do lots of these.   certain construction documents to have originated from the AIA forms. AMORTIZATION The principal portion of the loan payments made to the lender. Amortization is typically expressed terms of years in reference to an amortization schedule. For example: if a loan has 25 year amortization, this states the loan will be fully repaid over a 25 year.