How to Get Financing for a Custom Home in the Maryland and Washington D.C. Areas

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When building a custom home in Maryland or Washington D.C., there are a variety of ways to fund the project. Some homeowners have cash on hand, some sell an existing property before getting started, and other may sell stocks or the like. But many clients use a good old-fashioned bank loan. How does one go about getting a loan for new home construction? Well, we have lots of experience in this arena and are happy to explain.

For some, filling out an application and getting a loan to build a home is fairly straightforward. For other, such as those with more complex businesses or those who are self-employed, it can be a more daunting task to qualify because there may be less obvious factors to consider. No matter your circumstances, don’t assume you can’t qualify. There are experienced professionals, adept at considering all the relevant factors, who can help you qualify for new home construction loans; so, it’s always worth checking out.

custom home financing

Many of our clients come to us already partnered with a bank with whom they have a good working relationship. It’s reassuring to apply for a loan with a bank who knows the ins and outs of your finances, if you already have such rapport. However, in cases where our clients don’t have such relationships already in place, we’re able to help. Winthorpe has two banks we work with who are quite adept at handling new home construction loans.

In either case, the first step is to introduce all the involved parties: our client, the loan officer, and Winthorpe. First our client fills out the lender’s loan application. Then we all meet together to review the drawings and floorplans of the home with the lender, and Winthorpe answers any questions specific to the design and cost of the home. Those renderings are passed on to the lender to take with them. At this point, Winthorpe steps out so our client may review the details of their finances with the loan officer.

custom home financing

Upon approval, the bank will contact both us and the client, to give us the go-ahead on construction. With the exception of any questions the bank may have about the details of the home, all communications regarding financing are solely between the bank and our client. With lender approval in hand, we can submit the drawings to the county for permits. The construction loan is usually divided into stages, and at each stage the bank sends a representative out to the construction site to see that the expected progress has been met, at which point the bank releases a payment, also called a draw. Once construction is complete, the bank will close on the loan, much like in the purchase/sale of a house, transferring it from a construction loan to a mortgage.

As a company that specializes in building custom homes, we have years of experience with the ins and outs of construction loans. We know what documents and information to prepare for the loan process, and can guide our clients through the process, whether with their own lender or with one we recommend. It’s our goal to make the process as smooth and efficient as possible, so you can have the home you desire.  

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