National Title Center Helps Chicago Build, Starting With You!
Your bank will not give you a mortgage until your new home or business is finished. So, how does one borrow to build? The answer is a construction loan with a construction escrow. The bank will not give you the entire sum needed to build your dream home, project, or business up front, and you certainly do not want it. If you receive all the funds, you pay interest on all the funds. Additionally, the bank has no collateral to protect their interest, or loan. That’s where your National Title Center Construction Escrow works for you, and your bank.
An escrow is an amount of money that is paid at certain intervals. For a construction escrow, the interval is based on the amount of construction completed. This can either be defined by milestones or percentage as defined by the bank. Examples of milestones are plumbing finished, drywall complete, driveway laid and landscaping done, etc. Percentages are more subjective, and include the above completed work into a formula established by the lender. If your project is only ten percent complete, the lender really does not want to give you 30 percent of the approved loan amount, and they won’t. Also, the bank needs assurances that the money paid actually goes to those who construct your building. This obviously protects your bank, and certainly makes life easier for you and those working on your project.
Grow Safely with National Title Center as Your Partner
One great advantage to a National Title Center Construction Escrow Account is that it usually comes with a legal waiver of lien rights on your property. Why? Because we pay the contractors. You are not the middle man.
During construction, your builder may ask your permission to request money (a draw request) from the lender, to be paid through the escrow account for work completed to that point. National Title Center or your lender will conduct an inspection of your project to determine if the work shown on the draw request has been completed. National Title Center protects you.
When your money is used to pay the amounts specified in the draw request, National Title Center then collects the above-mentioned lien waivers from the appropriate contractors and suppliers. By giving the lien waiver, the contractor or supplier gives up the right to file a lien against the home for the work shown on the waiver. National Title Center again, protects you!
When your project is finished, your general contractor will give National Title Center an Affidavit of Completion and final lien waivers from all subcontractors and suppliers. A final inspection will be performed to determine that all work is, in fact, completed. If so, the final draw of funds will be paid. This is when your bank pays off your construction loan with your new mortgage. Welcome home.
So, are you ready to build? Your full-service friends at National Title Center have you covered. Give us a call.