• Complete a mortgage application package which includes the signing of basic documents. Prior to signing these documents, we will have a brief in-person or phone discussion with you, or have you complete and application through our web site, to get the information required for us to prepare these documents in advance. Any changes can be made at the document signing. Borrower(s) must supply income and asset information with the application to include:
• A current Pay Stub
• Your last two years Income Tax Returns
• Your last two years W-2s
• Your last two months Bank Statements indicating the source of down payment funds

What else do I need to bring with me at the time of application? - Following is a list of additional items which should be brought to JLB at the time of application:

• Detailed and accurate building plans (Blueprints)
• Construction Specifications (specs)
• An Executed Building Contract
• Copy of the deed and the check (front and back) used to purchase the lot, if the lot is titled to borrower.  If the borrower is purchasing the lot in conjunction with the construction loan, a copy of the purchase agreement will be required.
• A Property Survey
• Documentation for any other source of funds to be used as down payment and/or closing costs (i.e., gift letters, savings bonds, etc.)

A document in the application package you complete allows you to select your loan interest rate. This form allows you to lock or float the rate. Interest rates change daily and we will advise you of the available rates for your loan type on the date of application. If you lock the available rate when you sign this form, you will be offered that interest rate for 45 - 60 days. The loan must be approved and closed in that period. If rates should decrease after you sign the lock form, you are required to keep the rate you signed for. Correspondingly, if interest rates rise after your application lock date, you get the rate you locked.

If you decide to float the interest rate, your loan will be submitted to underwriting with the best rate available on the date of application. You are not guaranteed this interest rate. We will advise you of available rates on a regular basis during underwriting and you may lock a rate by completing the rate lock form. After your loan is submitted and approved, you may lock the interest rate at any time up to 3 days before the closing date of the loan. The interest rate available to you will be determined on the day you lock it. We will monitor rates and advise you as appropriate. Once you decide to change from a floated rate to a locked rate, you will need to resign the rate lock form.

With the completed application in hand, JLB Mortgage Group will order a credit report and forward the building plans to our appraisers.  If you are also applying for a HELOC to fund your down payment, we will provide the appropriate documents to the lender for approval.

When we receive the completed appraisals and credit report, we will bundle all the application documents and deliver them to our underwriters for a loan approval decision.

How long does it take to find out if my loan has been approved? - It normally takes about 5-7 days for a HELOC decision and 10-14 working days after application to learn if the loan has been approved.  The approval processes can run concurrently.  Assuming a loan is approved, the next step is the issuance of a Commitment Letter.  Upon receipt, the borrower is required to execute and return to the JLB a copy of the Commitment Letter, which serves as a formal acceptance of the loan terms and conditions offered by JLB.  Upon approval of the loan, JLB will also order all necessary title work required in connection with the loan.  This includes contacting the escrow agent (Title Company) to coordinate an appointment to sign the final loan documents, which include the Note, Mortgage Deed, Construction Loan Agreement, etc. 

What happens after the loan is approved? JLB Mortgage Group will contact you to schedule a closing for the Construction Perm Mortgage at a Title company.  We will prepare the closing documents and deliver them to the Title company.  We will attend the closing to answer any questions you may have about the closing process. 

After closing papers have been executed, all documents of record which must be filed with the County Recorder are forwarded to the appropriate parties by the Title company.  We work with the Title company in the transferring of title, filing of the mortgage, and disbursing of the funds for payment of title charges, lot purchase price, etc.  Once the transaction has been filed, or closed, a mechanics lien survey (also known as the first picture) is taken by the survey company.  After this picture is taken, work can begin on the dwelling.  Please Note: No clearing, digging, mowing or construction work of any nature can begin prior to the closing and the taking of the first picture.

At this point, you and the builder are approved, construction may begin, and requests for construction draws may begin as required.

Who pays for insurance during construction? - This should be discussed directly with your builder. In most cases, insurance is the responsibility of the homeowner.  The party responsible for purchasing coverage should be outlined in the construction contract.  The builder will, of course, carry workmens compensation and liability coverage, but the actual insuring of the property is normally paid by the borrower. 

The insurance provided by the borrower during construction is called a Builders Risk Policy.  You can usually obtain this coverage through the company that provides your homeowners policy.  What is covered varies between carriers, but generally insures against all property damage to the structure being built including all materials which constitute a permanent part of the structure.  It should also cover materials which have not yet been added to the structure but will eventually become a part of it. 

JLB Mortgage Group requires that a Builders Risk or Homeowners Policy with theft coverage (for building materials left on the lot and not attached to the dwelling) be obtained.  JLB Mortgage Group will require evidence of insurance with the mortgagee added as an additional insured prior to disbursing construction loan funds.

How does my builder get paid? - At JLB, we pay the builder on a draw basis.  Draws are based on the percentage of work the builder has completed as designated in the construction contract.  Borrowers funds are used for draws until the down payment requirement is met.  When a draw is needed, we will order a title update from the Title company and a property inspection from an approved appraiser.  These inspections are made for the purpose of determining percentage of completion of the property and that the home is being built in conformance with the plans and specifications submitted.  Inspectors do not inspect for quality of workmanship or materials.  Draw request percentages are specified in your construction contract and payment for the required inspections were pre-paid at the Construction Perm closing.

When do my payments start? - During construction, interest is billed monthly based on funds disbursed from the loan.  Borrower-contributed funds are used first, since no interest is owed on these funds.  A detailed billing is prepared 10 days before the end of each month.  This statement assumes interest to the end of the month.  Disbursements made from a construction loan after the cut-off date will be included in the following months billing.  Upon completion of the property, the loan is transferred to a permanent status and regular monthly payments begin.  At this time a coupon book will be generated and an escrow account for homeowners insurance and property taxes will be established.