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Build and Finance Your Dream Home with One Easy Loan

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Build and Finance Your Dream Home with One Easy Loan N MO IA RT D G R A A G U E G E ST. 1965 GUARDIAN MORTGAGE Build and finance your dream home with one easy loan. Disclaimer: This guide provides general information about Guardian Mortgage’s construction financing options and should not be considered legal advice. Certain terms and restrictions apply. Program available only to qualified borrowers. Program subject to change without notice. Underwriting terms and conditions apply. Loan subject to credit review and approval. Guardian Mortgage, a division of Sunflower Bank, N.A. | NMLS #709491 | Member FDIC Guardian Mortgage | 1 TABLE OF CONTENTS About Sunflower Bank and Guardian Mortgage 3 Simplify with Guardian Construction Loans 4 Guardian Construction Loan Checklist 5 Understanding Construction Loans 6 Pre-Construction: Application 7 Pre-Construction: Contractor Review 8 Pre-Construction: Project Review 9 Pre-Construction: Contract Review 10 Pre-Construction: Conditional Approval and Loan Closing 11 Pre-Construction: Closing 12 Construction Phase: Draws 13 Construction Phase: FYI 14 Converting from Construction Loan to Permanent Loan 15 Resources 17 FAQs - Frequently Asked Questions 18 Helpful Terms 19 Meet Your Construction Mortgage Loan Originator Aaron has a background in construction and a tremendous amount of lending experience. Contact him with any questions. Aaron Meilich Mortgage Sales Manager NMLS# 769327 916.798.3000 [email protected] GuardianMortgageOnline.com/AaronMeilich Guardian Mortgage | 2 About Sunflower Bank and Guardian Mortgage Guardian Construction Loans are unique programs that make home construction funding easier. Your journey begins with insight and assistance from a Mortgage Loan Originator (MLO) at Guardian Mortgage. Together with your MLO, the team at Guardian works to process your application, and approve, close, and fund the construction-to-permanent loan. When it’s time to build, Sunflower Bank assists during the construction phase. The Construction Loan Administrator (CLA) at Sunflower will review, approve, and fund all construction draws, and complete all the required project inspections during the draw phase. Sunflower Bank services the loan during this phase, administering the interest-only payments and any escrow deposits for taxes and insurance. When construction is complete and the loan enters the permanent phase, the servicing reverts to Guardian Mortgage. We hope you’ll take advantage of the amazing things that can happen when you work with a trusted mortgage company that’s backed by the power of a community bank. Guardian Mortgage Sunflower Bank Founded in 1965 on the principles of integrity, superior Founded in 1892. customer service, and trust. Community bank with full range of banking services. Originating loans in over 40 states. Devoted to Creating Possibility in the lives we touch Trusted leader focusing exclusively on residential home loans. and the communities we serve. Dedicated to communication, honesty, and responsibility. Guardian Mortgage | 3 Simplify with Guardian Construction Loans Why make things more complicated? Guardian Mortgage eliminates construction disbursements, and change orders. added stress when you’re building a home or tackling major renovations. You will have an opportunity to gain a full You won’t need to spend valuable time and energy shopping for multiple understanding of the process and requirements. loans for land purchases, construction costs, and long-term financing. It is our goal to ensure that the construction Spend less time thinking about financing ... and more time focusing on lending process goes smoothly. And remember, your new adventure. the loan must close prior to the start of any construction work. Benefits: No need to shop for multiple loans. Time-sensitive items to be aware of Simplified, in-house draw process for borrower and general contractor. while your home is being built Interest rate is locked for peace of mind. The Guardian Construction Loan allows 18 Lot purchase or payoff may be included. months for the construction to be completed. Interest-only payments during the construction phase. If there are potential delays, you must contact Allow up to 18 months to complete your construction. the MLO and the CLA representative as soon Only one closing ... only one set of closing costs. as possible. Once the project is complete and the final required documents are obtained While your project is being built satisfactorily, the construction loan will then roll Once your loan is approved, you can expect ongoing contact throughout to the permanent loan directly. This is a one- the construction period with your Guardian Mortgage Loan Originator time-close loan, so a second loan closing is (MLO) and Sunflower Bank’s Construction Loan Administration (CLA) unnecessary. representative. Prior to loan closing, the MLO and CLA will conduct a meeting with you to discuss the construction lending process — you will go over inspections, Guardian Mortgage | 4 Guardian Construction Loan Checklist Step 3: Construction loan approval and closing File is underwritten and approved. Building permit issued. Step 1: Loan application and selection of Closing date scheduled. general contractor Closing Disclosure (CD) is delivered to you, showing the Contact your Guardian Mortgage Loan Originator final loan terms, closing costs, prepaid expenses, and (MLO) to discuss your goals and project plans. cash needed to close. Learn more about the Guardian Construction Loan Closing occurs. program. Step 4: Construction loan funds disbursement Apply for loan, providing requested documentation and disclosures in a timely manner. CLA communicates with you during this phase. Research and select a general contractor. Funds are disbursed according to loan agreement, Provide requested information and documentation Sunflower Bank disbursement policy, and draw schedule. regarding both Builder Risk and contractor general You make monthly interest-only payments to Sunflower liability insurance. Bank as shown on payment statements. Provide requested construction contract and related Step 5: Conversion to permanent loan documentation. Construction is completed. Step 2: Conditional approval and pre-closing Proof of permanent homeowner’s insurance provided construction meeting Interest due and/or outstanding fees paid. Loan is underwritten and status changed to conditionally Certificate of Occupancy or signed-off Building Permit approved. issued by local governing authority. MLO schedules pre-closing construction meeting with Final re-inspection report received from appraiser. Construction Loan Administrator (CLA), project manager, Any unused (not-disbursed) funds are applied to contractor. permanent loan as principal payment. Guardian Mortgage | 5 Understanding Construction Loans By definition, in order to get a mortgage loan on a home, the home must already exist. So, in the strictest sense, a traditional mortgage can’t be used for buying land or building a dwelling. In order to buy or build, a separate, short-term construction loan is needed. Think of a construction loan like a line of credit. There are draws, where you only take out the money you need, and interest is only charged on the amount drawn. Since it can be risky for a lender to loan money on something that doesn’t exist, it requires an inspection of your plans and requires that you use an approved builder. After the home is completed, it is inspected to ensure compliance to the plans and to local ordinances. Then, a separate mortgage is taken out, using the home as collateral. Traditionally, the problem with this arrangement is that two or more separate loans have to be taken out, which also means multiple sets of closing costs. And the market may change during construction, which could result in rate changes or in difficulties getting financing on the completed home. You avoid multiple closings and The Guardian Mortgage Construction Loan program avoids these complications simplify things. Our because it consolidates all of these loans into one. It begins as a construction loan and experienced team automatically converts to a permanent mortgage loan once the home is complete. of professionals will Depending on your loan-to-value limitations, the loan may also be able to cover: guide you through Lot purchase or existing lot loan payoff. every step of the way, working with you to Closing costs and Contingency reserve. Create Possibility and Interest and Escrow reserves. make your dream Other soft costs. home a reality. Guardian’s home construction funding solution helps you avoid having to shop around for different loans—you no longer have to spend time looking for a loan for the purchase of the land, the construction loan, and the final home mortgage loan. Guardian Mortgage | 6 Pre-Construction: Application An application is a file that contains borrower information and demonstrates how likely the loan is to be repaid. Your Guardian Mortgage Loan Originator (MLO) will help you through the process, answering questions and walking you through items that may require explanation. You can facilitate the speed of the process by being prepared with the requested documentation. Keep in mind that returning all necessary items as soon as possible will help ensure your timeline stays on track. Items you may need to complete application: Executed contract with the home If self-employed, provide a year-to- dividends, etc.) will require builder (if available at the time of date P&L statement. documentation evidencing receipt loan application). Employment history for the past
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