Aug 18
What You Need to Know About Getting a Construction Loan

If you are searching for a new home, you keep a list of “must-haves” i.e. an ideal location, the perfect outdoor space, or an inspiring view. But the house that meets your wish list may be hard to find. Sometimes, the simplest way to get your dream home is to build it. The Mortgage Department at First New Mexico Bank, Las Cruces can lead you through the process of obtaining a construction loan.

What Is a Construction Loan?

Individual home construction loans (a construction loan obtained by the future homeowner) are usually short-term and used to cover home construction costs. Along with the standard financial information you would deliver to a mortgage lender, you also need to provide a building timetable, a construction budget and detailed plans. As construction timelines can be unpredictable, due to factors like availability of materials and weather conditions, it is best to build time “cushions” into your schedule.

How Does a Construction Loan Work?

Once you are approved for a construction loan, you will receive a construction draw request form which you will utilize to request advances. First New Mexico, Las Cruces will make these advances, based on the percentage of construction completed, contingent on an inspection. You will only be responsible for interest payments during the construction period.

When the construction of the home is completed, your loan will convert to a traditional mortgage (also known as permanent financing) provided by our mortgage lending department.

First New Mexico Bank, Las Cruces is an ideal source. The Mortgage Department webpage has useful resources you can explore, such as a mortgage qualifier tool and a mortgage comparison calculator.

Why Choose First New Mexico Bank, Las Cruces?

As a local lender dedicated to your community, First New Mexico understands Las Cruces’ unique building market. Our mortgage lending staff is ready to guide you through the process of building your dream home. Contact a lending specialist at (575) 556-3000 or begin the process online with our Mortgage Request Form.  We will get back to you promptly by telephone to discuss your needs and help you through the initial steps of the process. We look forward to hearing from you!

First New Mexico Bank, Las Cruces also offers construction financing, residential (both spec and pre-sold) and commercial loans to professional builders. Please contact our commercial lending staff for further information.


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