Why Does the Construction Loan Approval Take So Long?
Mortgage applications take between four weeks to three months to process. The construction loan approval process takes between one to three weeks longer. Construction loans finance a property that doesn’t exist yet. Therefore, lenders must take extra steps. Most construction projects take between six months to 12 to complete. In addition, most reach the finish line. Nonetheless, lenders must set a timeline for the project.
The timeline helps lenders estimate when they will release progress payments. For construction loans, lenders do not release the funds in a lump sum. Instead, they release them in increments.
Lenders require additional documents from owner-builders and investors. They include:
- Building plans
- Intended timeline
- Proof of land ownership
- Building crew information
Loan specialists process the extra documents. Thus, it adds extra time to the approval process. Nonetheless, applicants who stay on top of submitting the necessary paperwork can help move it along faster.
Mortgage House is a non-bank lender that funds construction projects. Our loan specialists have experience working with owner-builders and investors. They understand their expectations and sense of urgency. In addition, our team has access to proprietary tools that help them match the best loan terms to the applicant in most cases.
When you become a Mortgage House client, you receive access to our other loan products. Many individuals benefit from the Mortgage House business loan.
Construction Loan Approval Conclusion
Construction loan approval takes an extra week to three to process. Mortgage House loan specialists have access to proprietary tools that allow them to process applications efficiently. Contact our team today.