CONSTRUCTION
LOAN CLOSING
Important Steps Leading to Your Construction Loan Closing
Now that you have met with your Mortgage Expert to discuss your loan terms, your mortgage loan processor will contact you to obtain the required employment, income, and asset documentation for your construction loan. They will verify and validate the information provided by you to prepare for the final underwrite. This is called the loan processing phase and will happen simultaneously to ordering your appraisal report.
We encourage you to apply for your building permit at this time. Depending on the county and the time of year, you may experience delays in obtaining your permit. We recommend having your building permit in hand before you close your construction loan to avoid delays on your building timeline or going past the approved construction term.
Your Mortgage Expert will also request information regarding your builder and provide the necessary forms to complete. Each builder will complete a builder profile that includes a financial statement. Some builders have worked with us before and may have already provided a builder profile. These profiles do need to be updated and renewed each year.
Appraisal: Why is it Important?
The appraiser will review your plans, cost breakdown, and finish quality in comparison to recent home sales in the area to determine the appraised value. The appraisal is important for several reasons: First, to determine a market value for your home. Second, to determine if the appraised value supports the cost to build. Should a significant difference between the cost to build and the appraised value be found, USU Credit Union may request additional documentation and/or clarification regarding the overall project, or possibly additional collateral/down payment. If the appraiser notes any atypical or unusual property characteristics, the credit union again may require an additional collateral or down payment. Once your Mortgage Expert has confirmed the appraisal report supports the construction project, your loan will be submitted to underwriting.
Underwriting and Closing Your Construction Loan
Our underwriting team is committed to reviewing your loan as quickly and efficiently as possible, however; your loan may require additional review from our loan committee. This could extend the time for a decision on your loan. Keep in mind, there may be additional conditions or changes to terms noted by our underwriters or the loan committee. The underwriter will approve your loan once all the conditions have been reviewed, accepted, and cleared. You will now be ready to prepare for closing.
Once your loan is approved, your Mortgage Expert will contact you to give a timeline and process for closing. Our closing department will then send an initial Closing Disclosure for your review which details the terms of your loan. You will sign this initial document and will be able to close your loan after three business days. Your Mortgage Expert will coordinate a time for you to sign your final loan documents. You can expect your loan to fund the following business day. Now that your loan has funded, you and your builder can begin making draws.
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