What is a construction loan?

Construction loans are the perfect way to fund construction of the home you’ve always wanted. Similar to the way mortgages are used to pay for existing homes, construction loans can be used to pay for any of the steps involved in building a new home, including:

  • Financing the needed materials for your home
  • Paying the contractors for their labor
  • Obtaining necessary permits

These loans are delivered before construction begins and will roll over into a standard home loan once construction is complete.

How do construction loans work?

Construction loans (also known as “new build loans”) are a specialized type of financing that can help pay for the cost of building a new home. Once approved, these loans are delivered before construction begins and roll over into a standard home loan once construction is complete.

What are the different types of construction loans?
Construction Loans & New Build Loans

If you plan to build your dream home in Michigan, a construction loan or custom build loan is the way to go. Whether you’re building a primary or secondary home, Consumers Credit Union can provide new construction loans up to 95% of the value.

Plus, you’ll benefit from:

  • One-time closing, which means less paperwork to sign and fewer closing fees.
  • Locking in your rate at the time of application for up to 12 months ­– even if interest rates rise while you’re building.
  • A low, fixed construction administration fee.
  • Quick builder approval process.

Upon completion of construction, your construction loan rolls over into a standard home loan. It’s hassle-free because there’s no additional paperwork.

Vacant Land Loans and Vacant Lot Loans

Buildable Lot Loan

To be eligible for our vacant lot loans, you must have a credit score of at least 700, and the lot must be less than 40 acres. If the loan amount exceeds $125,000, a larger down payment may be required.

 

Recreational Land Loan

If you’re looking to purchase more than 40 acres for recreational use with no intent to build, this land loan option may be for you. It requires 25%* down on an aggressively low fixed rate over 30 years.

Ready to build your dream home?

If you’re looking to build a brand new home, Consumers has the convenient, fast construction loan process you need to get started. We’ve already helped provide financing for new home builds in the following West Michigan communities and beyond:

  • Battle Creek
  • Coldwater
  • Grand Haven
  • Grand Rapids
  • Holland
  • Kalamazoo
  • Lansing
  • Mattawan/Lawton
  • Muskegon
  • Portage
  • South Haven

Getting a home construction loan from Consumers is easy. All you have to do is live in Michigan and apply for a membership with Consumers!

Looking for current construction loan rates? Visit our rates page!

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Learn more about Mortgage Basics
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Learn more about the mortgage process and find the documents you'll need to get started.

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Heidi Bish, Mortgage Loan Office at Consumers Credit Union
Personal service from local lenders

Everything about loans at Consumers is done locally–including underwriting, processing and servicing. Throughout the construction loan process, a mortgage loan officer is your single point of contact. You’ll get the guidance and answers you need–when you need them–every step of the way.

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Savings Goal Calculator

Determine how soon that new house is going to be yours with our savings goal calculator.

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