My construction project is finished and I need financing to pay off my construction loan. What do I do?


This is what is called a "Take-out" loan.  The necessity for this type of financing occurs when you have finished construction on your home and would like to set up permanent financing. Although many lenders now offer One-Time Close loans covering both the construction and permanent financing, you are basically doing a refinance.

The need for a take out loan can take many forms.  One such situation is a borrower/investor building a "Spec" home. The project is near its completion and near the end of the construction loan term period.  The borrower/investor has been unable to pre-sell the property and now needs to refinance the property and buy some time while he or she markets the home for sale (thereby paying off the construction loan).

The "Take-out" loan will pay off the existing construction loan then place the borrower into a conventional loan product which best fits his purpose. Depending on the borrowers situation this financing can be provided by either institutional means or private investors (hard money).