Planning to build your dream home? Unless you have the money saved, you’ll likely need to find the right financing option to get your home built.
Michigan State Federal Credit Union (MSUFCU) has an option available called the construction loan, which can be used to pay for your upcoming new home construction.
As an MSUFCU preferred builder with 15+ years of remodeling experience, we have helped many homeowners, like you, partner with MSUFCU to finance their dream home remodel.
In this article, you’ll learn about MSUFCU’s construction loan, how to apply for the loan, and whether it’s the right financial option for you and your new home build.
What’s an MSUFCU construction loan?
The purpose of the construction loan is to help you finance the construction of a new structure, such as your new home.
Unlike the MSUFCU unsecured home improvement loan, which is meant for remodeling and home improvement projects, the construction loan can only be used to pay for the construction of a new structure.
Interest rates for the construction loan are as low as 6.25% APR. MSUFCU offers both fixed and variable interest rates with repayment terms of 10, 15, 20, or 30-year terms.
A 20% down payment is required for approval. The equity of the property your house will be built on can be included in the down payment.
Offering loan amounts up to $3,000,000, a construction loan through MSUFCU can be used to build new homes in most budgets, from simple to opulent.
Currently, MSUFCU construction loans are only available in Michigan.
The MSUFCU Construction Loan allows for up to five withdrawals during the 12-month draw period, which begins at the loan’s origination date. It also lets you make interest-only payments during the draw period.
How to apply for an MSUFCU construction loan
1. Become a member of MSUFCU
MSUFCU loans are only available to members of the credit union. If you’re not already a member, it is easy to join.
You can apply for membership online in as little as five minutes.
2. Get accurate prices from construction companies for your home
Receiving accurate prices before applying for the loan ensures you only borrow what you need.
Whether you’re receiving prices for a remodeling project or an entire home, you should always compare quotes carefully and pay attention to the details. Learn how to compare quotes you get from contractors.
3. Apply for an MSUFCU construction loan
With a price from the construction company, you know exactly how much you need to borrow. To apply for the construction loan, you can do so on their website, through MSUFCU’s mobile app, or by calling MSUFCU’s mortgage department at 517-333-2424.
During the approval process, MSUFCU will perform a credit check. Your credit score will be used, along with your desired loan repayment terms, to determine the interest rate on your construction loan.
Is an MSUFCU construction loan right for you?
Understanding if this loan is right for you and your situation is important for the success of your project.
An MSUFCU construction loan is a great option for you if you have an empty lot and envision building your new home on it. With low interest rates and flexible repayment terms, a construction loan with MSUFCU can help you build your new dream home.
With an easy application and approval process, you can get the money you need quickly to get your project off the ground.
If you’re planning a remodel or home addition, an MSUFCU construction loan will not be the right financing option for you. The construction loan is meant to fund entirely new structures like a new home. In these cases, MSUFCU’s home improvement loan may be a better option for you.
Next steps for using a construction loan to build your new home
If you’re in the beginning stages of building your new home in the state of Michigan and looking for financing options, MSUFCU’s construction loan is a viable option for you.
You’ll want to understand the loan’s specific details and approval process to give you insight into whether the construction loan is the right choice for you and your project.
Our team of home remodeling contractors has over 15 years of experience designing and building beautiful homes in the mid-Michigan area. We also partner with MSUFCU to help our clients find the right financing for their dream build.
If, instead of building an entirely new home, you are interested in remodeling or adding to your existing one, reach out to one of our project development advisors. We would love to talk with you.
To learn more about budgeting and financing a building project, read the following articles:
*The information provided in this article is for informational purposes only and should not be considered official financial advice. It's always best to consult with a financial advisor or professional before making any financial decisions.*