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Construction Second Trust for Home Improvement

A construction second trust is the newest type of construction loan. Unlike other second trust programs where value is based on the current condition of your property (before you start work), the Construction Second Trust is based on the value of your property AFTER the work is done. Also referred to as "As Completed" financing, it is useful to the homeowner whose first trust is at an attractive rate or who does not have enough equity in the property to pay for planned construction or improvements. 

We can lend up to 95% (combined first and second) of the completed value with a construction second trust. Also, the construction second trust requires NO builder approval if your loan is $50,000 or less and there are no structural changes. If your construction second trust loan amount is greater than $50,000 you will need a general contractor and have a "fixed price contract". The construction second trust will close only one time to save you settlement fees and will modify to your permanent second trust after your construction phase is complete.

While you are in the construction phase of your construction second trust, you make interest only payments calculated at the Prime Rate plus 2%. You have the option of locking your permanent interest rate at any time. And after construction, you have the option of loan terms of 5,15 year fully amortizing term, or a 30 year term with a balloon due in 15 years. The 30 due in 15 is the most common option as the 30 year amortization cycle keeps your payment low. There are no prepayment penalties on the second trust, you are free to pay off or refinance the loan at any time.

Why the Construction Second trust is a better choice than a home equity loan.

The product is better than a home equity loan because it offers you the security of a FIXED RATE and the convenience of one loan and one closing. Also, your loan amount is based on the value of your home after improvements, up to 100%. Best of all, you do not have to refinance your first mortgage.

I have included a list of the documentation needed to process your Remodeling Loan ,a section on Frequently Asked Questions and common misconceptions, a section on construction loan draw schedules, and information on construction loan fees .

NEW! A newsletter giving a detailed description of Home Improvement programs available by email.

We offer the ability to qualify and close your loan into several unique programs for borrowers with non traditional income or asset situations. Please visit my No Docs page.

As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come.  Read more about this free, no obligation service.

New! View my Wealthbuilder presentation and learn the safe way to manage your debt and fund your retirement.

I hope the information on this page was useful to you. Please scroll down to view my Mortgage Market Guide. It is a weekly publication explaining the financial markets from a consumer's perspective that is available on this website or by email subscription. I have nearly 8,000 subscribers today and would be happy to have you as well.

Construction Second Trust Prequalify for your Construction Second Trust.

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©1998-2009 Bob Gammache, CMPS
Certified Mortgage Planning Specialist

Phone (540) 719-1115
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NEVER an Origination Fee!

Extensive consumer information on construction,remodeling, first time homebuyer,and no documentation mortgages.