Union Bank
home under construction

Construction & Renovation Loans

As a leading financial partner in Vermont and New Hampshire, we are committed to helping you bring your dream home to life through our Home Construction Loan options. Home Construction Loans are designed to finance the building of a new home or the renovation of an existing property. They differ from traditional mortgages, as they provide funds in stages, based on the progress of the construction or renovation project.

To qualify for a Home Construction Loan, borrowers must meet specific eligibility criteria, such as creditworthiness, income stability, and a solid construction plan. At Union Bank, our experienced mortgage lending team is here to guide you through the process and help you secure the financing needed for your home construction project.

Are you eager to make your dream home a reality with a Home Construction Loan? Union Bank is here to help! Get started by applying for your Home Construction Loan online using our secure and user-friendly platform. If you’d like personalized assistance, don’t hesitate to reach out to our experienced lending team for one-on-one guidance.

Take the first step towards building or renovating your dream home with Union Bank. We’re excited to support you through the process and help you leverage the full potential of our Home Construction Loan options. Don’t wait – start your journey today!

Frequently Asked Questions about Construction Loans

  1. What is a Home Construction Loan and how does it work?

    A Home Construction Loan is a short-term loan designed to finance the building of a new home or the renovation of an existing property. These loans work differently from traditional mortgages, as funds are disbursed in stages based on the progress of the construction or renovation project. Union Bank offers what is called in the industry as a two close construction loan.  Your first close on your construction loan to build your property. After your home is fully completed, the construction loan is refinanced into a permanent loan.

  2. How do I qualify for a Home Construction Loan?

    To qualify for a Home Construction Loan, you must meet specific eligibility criteria, such as creditworthiness, income stability, and having a solid construction plan. Our mortgage lending team can help you understand the requirements and guide you through the process.

  3. Can I use a Home Construction Loan for both new construction and renovation projects?

    Yes, Home Construction Loans can be used for both new construction and renovation projects. Union Bank offers various loan options to fit your specific needs, whether you’re building a new home from scratch or renovating an existing property.

  4. What is the difference between a Home Construction Loan and a traditional mortgage?

    A Home Construction Loan is a short-term loan used to finance the building or renovation of a home, whereas a traditional mortgage is used to finance the purchase of an already-built home. Construction loans are disbursed in stages based on the progress of the project, while traditional mortgages are disbursed as a lump sum at closing.

  5. What are the interest rates for Home Construction Loans?

    Interest rates for Home Construction Loans can vary based on factors like creditworthiness, loan term, and market conditions. To get the most up-to-date rates, please visit our mortgage rates page.

  6. How long does it take to get approved for a Home Construction Loan?

    The approval process for a Home Construction Loan can take anywhere from a few weeks to a few months, depending on factors such as the complexity of the project, the borrower’s financial situation, and the underwriting process. It is important to work with your loan officer to determine the best time to submit an application for construction.

  7. Do I need a down payment for a Home Construction Loan?

    Yes, a down payment is required for our construction loans, with the amount depending on factors like your creditworthiness and the size of the project. A minimum of 10% down payment is required, and may be as high as 40% depending on the loan size and project.  Our lending team can help you determine the specific down payment requirements for your situation.

  8. Are there any restrictions on the type of property that can be financed with a Home Construction Loan?

    Home Construction Loans are generally available for various types of residential properties, such as single-family homes, multi-family homes, and certain condominiums. However, restrictions may apply depending on the specifics of the project and the borrower’s financial situation. It’s best to consult with our mortgage lending team for guidance on your particular project.

  9. Can a Home Construction Loan be converted to a traditional mortgage after the project is completed?

    Yes, construction loans are refinanced into a traditional mortgage once the construction or renovation project is complete. This process can provide long-term financing with a fixed interest rate and a more extended repayment period.

  10. What happens if the construction project takes longer than expected or goes over budget?

    Delays and cost overruns can happen during construction projects. Having contingency reserves, and accurate fixed price contracts are ways to manage cost overruns.  In some cases, you may be able to modify the terms of your Home Construction Loan or obtain additional financing to cover these costs. Our lending team can help you navigate any challenges that arise during the construction process.

Related Resources