• +971 4 388 7440
  • info@amitymortgages.com
  • +971 4 388 7440
  • info@amitymortgages.com

Financing for Under Construction Properties

Under-Construction Properties

What is Financing for Under-Construction Properties?

Under-construction property financing is a form of loan taken for a property that is under construction but not yet complete. Most homebuyers, investors, and developers do this to raise funds for the project still in the construction process. Such financing can involve many of the stages of construction, all the way from the initial purchase of land or property to funding construction costs. This would provide purchasers and investors with a payment-spreading option so that one can manage the investment until the property is finished and ready for occupancy or renting purposes.

Terms and Conditions

When considering financing for under-construction properties, it’s important to understand the key terms and conditions that apply. Here’s a quick overview of what to expect:

Loan Amount:

The estimated value of your property after the renovation, your credit score, and financial stability.

Repayment Period:

Typically upto 25 years, but may convert or roll over into a long-term mortgage.

Down Payment:

Typically around 50% of the project cost.

Interest Rates:

Usually higher than regular mortgages; can be fixed or variable

Draw Schedule:

Done in stages contingent upon construction progress inspection.

Documentation:

It contains project plans, builder contracts, proof of income, credit history, and construction budgets.

Why Choose Us for Financing?

Expert Guidance

Our team is well experienced in financing under-construction properties to ensure the best possible advice and options for your particular project.

Customized Solutions

Be it building a new home or an investment property from scratch or expanding existing structures, we are here to help you with personalized financing solutions.

Smooth Process

We concern ourselves with the minutest of details in the process from application to disbursement and make sure that the process is hassle-free.

Competitive Rates

The best interest rates with competitive terms are offered for all of your construction financing needs through our vast network of lenders.

How We Work?

Initial Consultation

The initial consultation enables us to get an overview of your project, financial situation, and financing needs so we can pre-qualify the most applicable loan options for your consideration.

Application

We will assist you in completing the loan application, organizing any supporting documents required for underwriting, and preparing for lender reviews and approvals.

Approval and Funding

Once approved, we work with lenders to facilitate the release of funds by the construction draw schedule and completion dates.

Ongoing Support

We are constantly in support and communication during the process of construction. We will help ensure funds are released as need be and problem-solve any issues that might arise.

Frequently Asked Questions

What types of loans are available for under-construction properties?

Common options include construction loans, builder financing and home equity loans.

Are interest rates higher for construction loans?

Yes, interest rates for construction loans are generally higher due to the increased risk associated with financing a property that is not yet completed.

What is a draw schedule?

A draw schedule is a plan for releasing funds in stages based on construction progress, with each draw subject to inspection and approval.

What documentation is required for financing under-construction properties?

Required documentation typically includes project plans, builder contracts, proof of income, credit history, and detailed construction budgets.

Can I use a home equity loan for construction financing?

Yes, a home equity loan can be used to finance construction by leveraging the equity in your current home.

What happens if the construction project is delayed?

Delays can affect the draw schedule and repayment terms. It’s important to communicate any delays with your lender to adjust the financing terms as needed.

Are there additional fees associated with construction loans?

Yes, additional fees may include application fees, processing fees, and inspection costs, which should be factored into your budget.

Can I make early repayments on my construction loan?

Many lenders allow early repayments but be aware of any potential prepayment penalties or fees.
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