What are the features of a 100% construction loan?


A no down payment 100% construction loan is usually available for Owner Builder Owner Occupants. The loan will include the cost of labor, materials and closing costs. The lot purchase may or may not be funded with a 100% construction loan, depending on the home owner circumstances. Many of those programs will allow interest-only payment with the principal due at the end of construction phase, similar to other construction loans.

Generally, full documentation is required with a 100% construction financing. If you want to go Low Doc or No Doc for a 100% construction loan, you are probably not going to get one. Most construction loans allow reduced doc for borrowers with 680 credit and higher. Low doc construction loans typically require 5 to 15% down payment.

Construction loans are extended typically for up to two years and payments due are usually interest-only on disbursed amount. Many construction loans go hand in hand with permanent loans and 15 and 30 year Option ARMs being the most popular loans among those. Construction mortgage loans are available with full, alternative and stated documentation.

100% construction loan, however, is usually only available full doc.

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