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Step 1
Find a lender that you like and is open and helpful to all of your questions. You won't like working with a lender who is hard to talk to or reach. They should be happy to answer any questions you have and easily explain things to you.
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Step 2
Choose a loan that is right for you and your situation. New construction loans are different from mortgages and should be handled differently. Normally, you pay only the interest while the home is being built and the principal is due upon completion of the home. This is when you can turn the loan into a mortgage with better rates. Make sure the lender lets you know all of the available options in your situation.
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Step 3
Get pre-qualified so you know how much you can spend and for what amount you need to make the construction loan. Find out the approximate monthly payments on the loan. Fill out a loan application and bring your tax and financial information to your lender.
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Step 4
Tell your lender what your exact plans are for building a home. Let them know if you own the land, don't have land yet or are buying the new home and land as a package. Let them see the house plans when you get them. Also, talk to a builder and let them know where you stand with the loan process. Working together with the lender and builder can make things much easier.
