Whether you are starting the process of building a home or another real estate project, you will need a construction loan. These loans are complicated due to high-interest rates, multiple negotiating options, and reporting requirements.
These may be complicated, but with the right Pennsylvania real estate attorney on your side, securing a construction loan will be a smooth process.
A construction loan is a short-term loan used to finance the building of a home or another real estate project. Sometimes called a “self-build loan,” the builder or home buyer will take out these loans to cover the cost of construction before taking out other forms of long-term funding.
Once the home or real estate project is complete, the borrower can either refinance the construction loan into a mortgage or obtain a new loan to pay off the construction loan. However, some construction loans may need to be paid off entirely by the time the building is complete.
In addition, if a construction loan is used to build a home, those funds may be paid directly to the contractor rather than to the borrower. The borrow and contractor can also determine if those payments will be in installments as the project reaches new stages of development.
Construction loans are not just for building new homes–they can also be used for restoration projects. Regardless of what the construction loan is used for, these loans can be costly because they have higher interest rates than other mortgage loans.
Construction loans are typically offered by local credit unions or regional banks. In general, you will need to provide a 20% down payment on construction loans, but some lenders require up to 25%.
However, if you have a low credit score, you may have difficulties securing a construction loan.
If you are concerned about protecting your interests while securing construction loans, you will need a real estate attorney. There are specific construction loan terms you’ll need to be familiar with while securing an advocate for your case.
Those terms include:
Not understanding these terms will make it difficult to negotiate the terms of your loan. But a
Pennsylvania real estate attorney can help.
Construction loans are complicated. And not every lawyer has the track record and experience needed for these matters. That’s why you need to go with Mazzoni Karam Petorak & Valvano. With extensive knowledge of Pennsylvania’s real estate laws, our attorneys will make sure you understand the process and will negotiate a fair deal.
If you live in Northeastern Pennsylvania and are trying to secure a construction loan, now is the time to get a Scranton real estate lawyer on your side. Put your trust in a law firm that puts your needs first. Contact Mazzoni Karam Petorak & Valvano for a free consultation today. Serving clients in Lackawanna, Luzerne, Wayne, Monroe, and surrounding counties.
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