Let's Talk Construction to Perm

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Jimmy Vercellino, Mortgage Loan Originator / Regional Residential Mortgage Director NMLS 184169 at First Western Corporate NMLS 477166
Vercellino Team Headquarters: 3602 E Campbell Ave, Phoenix, AZ 85018
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Let's talk construction to perm home financing. Here's everything you need to know about construction to perm home loans and how the process works.

[@Jdjdjfhehehd]

A year ago, you put out a video about va construction to perm loan, you said that the borrower doesn’t not make any payments while the home is built, that included interest. Is there a va guideline document that could explain that . Can you explain what payments the veteran has to meet during the construction process?

[@christsaves7405]

These terms are kind of insane 🤣

[@tomspencer1436]

Let’s use your example of $500k + $500k. There are always “overruns.” The tile chosen is $2k more than estimated. The fixtures are $1k more. OR, through budget and construction management, the total expense is $5k below the initial estimate. How is this handled at the certificate of occupancy stage? Is the final mortgage amount bumped to $1.003 million or reduced to $995k?

[@jasmeengould-warren8764]

Great question.

[@SO1012488]

I believe any additional costs or upgrades to the original plan are paid out of pocket to the builder

[@akprius6765]

What if you were building a multi-generational home with parents and or in/laws, can more than one person sign on the construction loan?

[@kirkhamfamily9608]

Good video, my question that I can't find an answer on is will my mortgage top number be the total project value or simply what I own on the loan.
Ex.
Our owned free/clear land 80K
Est. Build cost 350K
Also plan to put 50K down
Im trying to figure out if my mortgage payment will be more like 1500 or 2K, 30yr FYI
Any insight is helpful again thank you!

[@android6679]

Here you go:
Land = $80k
Cost to build = $350k
Total estimated value = $430,000
Loan amount = $312,000 or 72.5% LTV
Closing costs estimate = $12k
$50k additional deposit down
Cash to close = $350k (build cost) + $12k (closing Costs) = $362k - $312k (loan) = $50k cash to close. But you are putting $50k deposit down upfront so it would be $0 on your closing disclosure. Owning the land free and clear is definitely advantageous.
Principal and interest (P&I) payment = $312k (loan) + 5% estimated rate would be $1,674.88 but typically you would go off a 29 year amortization because of the 1 year build so the payment would be $1,699.96

[@CaliRepublic77]

@@android6679I think he is asking if the mortgage is based on the cost he took out to construct or the total property value after it’s built.

[@kathywilliams903]

Do you do FHA construction loans

[@tcarp77]

You do anything commercial?

[@sanmioluwarinde8934]

Terrible teacher