Process for a Construction Loan...

Construction loans are story loans. That means that the lender has to know the story behind the planned construction before they're willing to loan you money. Because it's a story loan, it's not going to be standardized like mortgage loans underwritten to Freddie Mac or Fannie Mae guidelines. That said, there are some common features to a construction loan. Construction loans typically require interest-only payments during construction and become due upon completion. Completion for homeowners means that the house has its certificate of occupancy. Because of the current lending environment, very few lenders out there are doing construction loans anymore... In your scenario, you already own a home, and what you're looking to do is remodel/addition. FHA has a product called the 203K, which will allow you to do a full blown remodel/addition and let you roll those costs into a new first lien mortgage. On the conventional side, there is similar product, however very few lenders are familiar with the guidelines, so they will usually tell you they don't have a lender doing them.. best advice I can give you is to contact a LOCAL mortgage broker, not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Well said William