Marshall Sparkman

A construction loan is a short-term mortgage to build a home. There are different types and variations, but to make it as simple to understand as possible, you take out a construction loan when you want to build rather than buy a home. The funds from a construction loan cover the construction costs for the house and any permanent fixtures, including land, labor, materials, and services like construction plans and permits, etc.

With construction loans, the builder provides an estimate of construction costs and a project timeline prior to loan closing. Your lender manages your payments (called draws) directly to the builder as construction moves forward. Once construction is complete, the construction loan is either converted to a permanent mortgage or paid in full.

The cost to build a house depends on a variety of factors like the size of the home you’re building, materials being used, customization and labor costs and geographic location. Other things to consider include land purchase, permits and fees, utility hookups and landscaping. If land isn’t included, this can reduce your costs, especially if you already own a lot

First thing you should do is consult with a local mortgage lender and if you are a Veteran, there are 100% financing options available. A CCM loan officer can help you navigate the various loan programs and find the best fit for your situation. You could also consider using land equity: If you own land, this can be an asset to leverage when securing financing.

Building a house may take up to 12 months, but the exact timeline depends on several factors like weather, permit and inspection speed, material and labor availability, custom vs. cookie-cutter design, and size and complexity of the house. Your builder should provide a detailed timeline for you.

When you’re comparing the costs of building a house versus buying one, you have two choices to consider. Building a house puts you in control of everything from the materials to the square footage to custom designs. When buying an existing house, the condition, competition from other buyers and market conditions all play a factor in how much you spend.

Non-QM loans use expanded home financing criteria to give borrowers income and credit flexibility. From qualifying with bank statements or 1099 income to purchasing investment properties, Non-QM loans open doors to homeownership many don’t realize are available.

Also known as Investor Cash Flow loans, DSCR loans are designed to help real estate investors secure financing with their rental property’s cash flow. Instead of relying on personal income, DSCR loans use the debt service coverage ratio (DSCR) to qualify.

DSCR is calculated by dividing the monthly rental income by principle, interest, property taxes, homeowners insurance and association dues.

Since Non-QM loans don’t follow traditional guidelines, they’re considered riskier. That’s why lenders often require a higher down payment, interest rate and other terms.

But Non-QM loans are a safe financing option that benefits many homebuyers. Talk to a CCM loan officer to learn what’s right for you.

Bank Statement loans allow you to qualify for a mortgage using your bank statements instead of tax returns. These loans are designed for borrowers who have strong credit and finances but don’t have traditional income, like self-employed workers.

To qualify, you’ll use the average of your deposits over a 12- or 24-month period. If your work doesn’t provide a W-2, this may be the loan for you.

ITIN loans give you a way to qualify for home financing without a Social Security number. Instead, your Individual Tax Identification Number (ITIN) makes homeownership possible.

At CrossCountry Mortgage, we provide numerous ways to qualify using an ITIN. Bank statements, liquid assets, 1099 income and more can all be used to buy a home with our ITIN loan.

No. Conventional loans follow criteria established by the Consumer Financial Protection Bureau (CFPB). Non-QM loans use different standards that provide flexibility for borrowers who may not meet conventional requirements due to the type of home being purchased, financial circumstances or non-traditional income or employment.