Here’s the kind of information you should have at hand when you apply for your construction loan. This is a general list:
* Pay stubs for the most recent 30-day period (including a year-to-date summary) for each of the borrowers on the loan
* Most recent W-2 statements for all borrowers
* Relocation letter on company letterhead, if applicable
* Complete signed tax returns for the last two years, including schedules and statements. If incorporated, personal and corporate returns should be provided
* A copy of an extension to file, if applicable
* Year-to-date profit and loss statement, if beyond June 30th
* All pages of checking and savings account statements from the most recent 30-day period
* All pages of asset account statements, including money market funds, mutual funds, stock accounts, IRAs, CDs, etc., from the most recent 30-day period. Please note that Internet screen prints are generally not acceptable
* Gift letter, if applicable
* Evidence of the sale of your previous home, if applicable
* Verification of large deposits
Miscellaneous Borrower Documents
* Any divorce decrees, child support agreements, or separate maintenance agreements if alimony or child support is either paid by any borrower on the loan or received by any borrower on the loan and is used as income
* Written explanations for any credit issues that appear on your credit report
* Copies of any leases and two years of federal tax returns on any rental properties you own
Construction and Builder Documents
* Construction plans and specifications
* Fully executed Purchase/Construction contract accounting for all work. This may involve separate bids and/or contracts if work is not included in the contract
* HUD1 Settlement Statement from the purchase of the land, if the purchase occurred within the past 12 months.
* Name, phone number and address of the builder
* Name and phone number of your preferred settlement agent (i.e., title company, attorney, escrow agent, etc.)
* Course of Construction insurance
* Certification for any private well or septic system
* Foundation survey (In most states, this can be handled by your title company). Its cost is usually not covered in your closing costs.
* Verification of deposits to your builder and/or land seller, such as cancelled checks or a copy of a certified check
Ordering the Appraisal
The Lender will order a full appraisal of the proposed property based on the final plans and building specifications.
All conditions (such as debt reduction or additional documentation) for your permanent loan must be satisfied prior to the close of construction.
Usually your permanent loan commitment is valid for 12 months from the date your construction loan closed. If this loan commitment expires before your permanent loan closes, you will be required to update your application, which will require new documentation. Any change to your credit profile may negatively impact your ability to get a permanent loan.