If you are wondering if construction loans include land, you are in the right place. They often include funds to purchase the land that’s being built on. These loans are sometimes referred to as “land and construction” loans, “land and build” loans, and “land equity construction loans.” Just as there are many kinds of borrowers with different needs, there are also many types construction loan programs available to serve those needs. Let’s break down the kind of construction loan you’ll be getting.
Some Construction Loans Include Land to be Used as Collateral
When we use the term “land,” we’re referring to the physical property or lot where you intend to build your new home. If you already own that land, you may use it as collateral for your construction loan. If you already have a mortgage on the property, a lender like The Federal Savings Bank can help you refinance that mortgage into a construction loan with your land equity.
If you do not own the lot you want to build on, you may also choose to add the cost of the purchase to your total loan amount. Many borrowers who seek a construction loan that includes land opt for a single-close construction loan, which automatically converts the construction loan into a long-term mortgage once the construction is concluded. This helps streamline the process for those who just want to get their family into the home they designed.
If you already have a home on the property that you do not intend to demolish as part of the construction process, The Federal Savings Bank offers renovation loans, as well as no-collateral personal loans up to $35,000 for smaller jobs.
Land and Construction Loan Requirements
Before you contact one of our construction loan specialists, be sure to check out our Resource Center for new home construction. There you can learn more about the credit and income criteria you must meet when you apply for a land and house construction loan. One of our team members can help you set your budget and expectations for the home you wish to build or renovate.
Don’t compromise on the chance to build your family home. Give us a call at 877-788-2520 to set up a consultation that won’t have an impact on your credit!
Subject to credit approval. Terms and conditions may apply. Property insurance is required for all loans secured by property.