What kind of documents will I need to provide?
This list is not comprehensive and can grow quickly depending on your personal situation.
- House Plans
- Cost Breakdown/Budget
- Contract with Builder
- Deed to property
- Current paystubs to include the last 30 days
- Current bank statements to include 60 days
- Last 2 years of W-2s
- Signed copies of your last 2 years of Federal tax returns with all schedules
How much do I need for a down payment?
Minimum down payment is 10% of the cost-to-build plus the land value. If you have owned your lot for at least 12 months, OECU can consider the appraised value of the lot as a contribution toward your down payment.
How does a construction loan work?
A construction loan only lasts for a maximum of 12 months, and you are essentially given a line of credit up to a specified limit, and you submit “draw requests” to OECU, and only pay interest as you go.
Will I need to sell my current home before I get a loan to build a new home?
It will depend on your financial situation and whether you can handle the total amount of debt of both home loans (existing and new).
How do I choose a builder?
You should shop for your builder as carefully as you shop for your home.
- Ask friends and relatives for recommendations.
- Check the Oklahoma Home Builders Association List
- Ask the builder for references. When you talk to previous clients who say the builder kept in constant contact and the project was completed on time you're probably hiring a reputable builder.
- Visit a builder's recently built homes and subdivisions. Drive by on a Saturday morning when home owners may be outside doing chores. Introduce yourself and say you are considering buying a home from the builder who built their home.
Can I build the house myself?
In order to finance a construction loan with OECU, the builder has to be a member of the Central Oklahoma Home Builders or Oklahoma State Home Builders Association. Subject to OECU's approval.
How do you calculate the construction loan amount?
The land value plus cost-to-build or the appraised value - whichever is less.
Do I need to already own a lot?
Nope! OECU frequently does construction loans that include both the house and the land - it’s all part of the cost of building a house. If you have your land already, that’s great, but you certainly don’t need to in order to get a construction loan.
Can I use a VA loan for a construction loan?
Nope! A VA Loan can’t be used as a constructions loan but can be applied to your permanent financing after your home is complete.
Can I get a loan if I've already started construction?