Arizona is located in the southwestern region of the United States. The state is well-known for its climate, commercial capitals, and high employment opportunities. There are many well-known companies located in Arizona and therefore, more and more people are re-locating to Arizona for a better life.
To obtain a construction loan in Arizona, one can apply to many lending institutions. On the other hand, it is far easier to find lenders online. In this way, you can compare lenders' rates and choose the one that best meets your needs.
Requirements for Arizona Construction Loans
Requirements for an Arizona construction loan are varied. Generally, mortgage companies demand that you own land before you apply for a construction loan. This is because if the borrower defaults, the bank or a lender has a way to recoup their investment. In addition, a standard construction loan may be based on the one year plan and, therefore, you are expected to pay off the construction loan within this period.
Budgeting is important before you apply for an Arizona construction loan. You should review all the quotes in order to determine if you can repay the loan within the set timeframe. Repayment should not only include the amount of the monthly installment, but it should also include other fees and charges which are applicable to the construction loan.
When applying for a an Arizona construction loan, you should take into account the sub-contractors costs such as plumbers, masons, excavators, landscapers, electricians, painters, costs for well and septic tanks, windows, roof, and even grass seed. If any of these are left out, it may difficult to repay the construction loan.
Once you have itemized your expected expenses, you can share your plan and estimation with your mortgage representative. These advisors can help you breaking down the disbursements. These disbursements are commonly known as draws. Do not rush to schedule draws since there will be a service charge attached to every draw. For example, you need to inform the bank before it releases a draw. The bank inspects the work and confirms that the work is performed commensurate to the construction loan amount.
How to Choose an Appropriate Lender
There are different ways to find an appropriate Arizona construction loan lender. You research online where many lenders are listed; check their quotes and can compare them with each other; and choose the one that is more suited to your budget, plan and schedule.
If you get confused during the research process, you can go to a professional advisor for Arizona construction loans who can guide you in legal matters; how to choose an appropriate lender; and other procedures required in obtaining a construction loan.