Build a Home With the Best Construction Loan Lender

Sometimes you’ll find the perfect home that’s move in ready, while other times, the only way to get what you truly want is to build a new home from the ground up. That’s when you need to secure a residential construction loan.

What is a Residential Construction Loan?

A residential construction loan provides you with the funding needed to build your dream home. These loans are short term compared to a traditional home mortgage and the funds are paid out in stages as work is completed on your home.

While you’re likely familiar with a traditional home mortgage, information about a residential construction loan isn’t generally common knowledge. Here are some primary differences between the two loan types:



Residential Construction Loan

Term Usually ranges from 15-30 years Term can vary based on your building timeline. With residential construction loans, funds are disbursed to you and the builder as progress is made on the home, not all at once like a traditional mortgage. 
Purpose Purchase a home that is already built or is being built by a construction company, usually in a neighborhood Funding to have your home custom built, typically on your own land, through a private construction company you hire
Rates Can be fixed or variable depending on your lender Fixed rates
Repayment You pay your mortgage each month after securing the loan You pay interest only until construction is complete, then switch to monthly mortgage payments

At First Bank and Trust Company, we offer flexible financing to cover your home construction needs. We have experienced Mortgage Lenders in Virginia, Tennessee or North Carolina, ready to assist you with financing your new build.

Construction Loan Requirements

Qualifying for a Residential Construction Loan

When applying for a residential construction loan, be prepared to provide the following:

  • Construction timeline: What timeline do you have in mind for completing your home construction?
  • Realistic budget: Your lender will want to know how much you expect everything to cost, so prepare a realistic budget outlining all costs associated with the project.
  • Detailed plans: Along with your budget, have the overall plans for your construction project available so the lender is aware of what is being financed. You will likely be asked to provide plans or blueprints from your builder or architect.
  • Traditional mortgage documents: You will also need to provide all the traditional documents you would submit if you were securing a typical home mortgage including tax returns, bank statements and pay stubs. With a construction loan, your builder may also be asked to provide some financial information.
Interior Framing Of A New House Under Construction

Construction loans present risks that standard purchase or refinance loans do not and contain variables common with construction. That’s why you want to be sure that you find the right lender to support you through the qualifying and underwriting process.

Typically, a residential construction loan will require a down payment, similar to a traditional mortgage loan. The amount of your down payment can vary based on different factors, so it's best to get in touch with one of our mortgage expert for the details.

Like most loans, higher credit scores can often increase your chances of qualifying for a loan at lower rates and terms. To learn more about qualifications, get in touch with our team by calling 866-285-2239.

At First Bank and Trust Company, we offer construction-to-permanent financing, so you will not have to worry about converting your loan or a second closing. 

New Home Construction
Resources & Tools

Help with Your Residential Construction Loan

Securing a home loan requires support every step of the way. First Bank and Trust Company is here to help you through all stages, from the loan research phase, to the day you break ground, move into your new home, and beyond. Here are some of our most useful resources and tools to help you through this process.

Budgeting Calculator

Home Affordability Calculator 

Learning Center

Competitive Construction Loan Rates

At First Bank and Trust Company, we offer competitive construction loan rates for the life of your loan. Whether you need a 30-year fixed loan or simply to refinance, our local representatives will find a financing solution that works for you.

Since mortgage interest rates change frequently with the market, it’s best to work with your local mortgage representative to get your custom rate quote.

Construction Design Documentation And Tools On

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