Financing New Construction: Getting Started

If you are considering building a home,
financing your dream could seem confusing.
But BB&T has made it simple. A BB&T
construction-to-permanent loan is specifically
designed for clients who are building a home.
With this type of loan, your construction financing simply converts to a permanent mortgage when your home is complete. You save time and money because you do not have to secure and close on two loans.

Here's what you need to know to get started.

Determine If Your Property Is Eligible

One of the qualifications of a construction-to-permanent loan is that your new home must be an owner-occupied primary residence or a second home. The property type must be a one-unit, single-family detached home. BB&T Home Mortgage also requires the use of a licensed builder in the construction of your home.

Make Your Loan Application

When you are ready to begin the application process, contact your BB&T Mortgage Professional. The application process is not much different than applying for a standard home loan. In addition to the usual financial information required for a loan application, you will also need to provide the following:

• A copy of the construction agreement with your builder, which must specify the cost of your home including options, upgrades and lot value
• If applicable, a land contract for the lot on which your house will be built
• A copy of the floor plan and facade of the house if applicable
• A deed to the lot, if applicable

Once we receive all the documentation, a decision is typically rendered within 48 hours.

Close on Your Loan

After your loan is approved, BB&T Home Mortgage will draft a loan commitment document detailing the legal issues and requirements for your loan. You will receive this document at closing, but will be provided with a sample document to review in advance. At closing, you will need sufficient cash to cover the closing costs and the minimum down payment for the purchase of your lot.

Begin Drawing on Your Loan

You will pay the remainder of the down payment on your lot to your builder at the start of construction. When your down payment funds are exhausted, you can begin drawing funds from your construction-to-permanent loan. You will not start making interest payments until you begin using these funds.