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  • New Construction Loans

    You are getting ready to build your custom designed new home and you will need to obtain financing for your project. Financing for your new construction home is readily available. When building a new home, there are many things to consider. Location, size, design, colors, cabinets, counter tops, and more. One of the biggest items, and often overlooked, is your new home financing.


    First, sit down with a mortgage lender. Determine you budget, how much you can afford, what payments would look like, and get fully pre-approved.

    If you have an existing home to sell, contact a reputable real estate agent, to determine a marketing plan on your home, and how much money you may expect to profit from the sale.

    Finally, it is time to meet with a builder and their design team to finalize your new dream home with a location and price that fits your lifestyle and payment objectives

  • We do new construction end loan financing in MN WI SD

    New construction loans MN WI SD
    New construction lender MN WI SD


    This type of new construction exists primarily in new developments where you pick from one of the existing lots, and pick from a number of designs that builder offers.

    After finding the right home, picking out a design, and signing a purchase agreement, you will usually give the builder some up front earnest money (usually about 1% of the purchase price, (but could be more or less) to build you your new home. The builder then carries all the costs to build the home, and you close on the deal once construction is finished.
    With this type of new construction, you can pick from just about any type of mortgage loan, from standard conventional loans, FHA, VA, USDA, and even first time home buyer and down payment assistance loans. This is generally the preferred method for most people.


    This type of construction loan generally is when you find a lot on your own, typically not in a development, and wish to build a home. Construction loans are a lot more work and paperwork intensive. They also generally require 20% for down payment, and a very strong application with excellent credit scores, and low debt ratios.

    This type of financing is more complicated, and may also mean you are working with a smaller builder who can not afford to carry the construction costs. Once you've picked out a lot, and have worked with the builder to draw up the new homes "plans and specs", you go to mortgage lender or a small local bank for a construction loan. 

    The lender / bank will review everything, including the builder's resume, experience, references, and then review the line item cost breakdown, materials list, and your construction contract.

    Assuming all looks good, the lender approve your construction loan, and will slowly give out money, known as draws, as the construction goes on. Most banks limit the draws to just four over the construction period. Usually the first draw is to buy the lot. The second draw is after the foundation is in, and the third draw being after framing is done. etc.

    During the construction period, you will usually make interest only payments to the lender, based on the amount you have used (drawn) so far. Most construction loans are good for only 6 months to 1-year before you need to pay them off.

    As the home nears being finished, or is completely finished, you now need to pay off the banks construction loan. You will work with a traditional mortgage lender, like us here at Cambria Mortgage to select your end loan, which is usually the standard 30-year fixed loan.

    As a side note, our parent company is Cambria Quartz Counter tops... Which you will very likely end up using in your new home. We give everyone who uses Cambria Mortgage a $400 rebate coupon for Cambria Counter tops after closing on any loan.

  • Where to Get your Construction Loan:

    New Construction loans MN WI SD

    If the builder is carrying the cost of construction, you can use any mortgage lender you wish for the mortgage loan. Banks, Brokers, or independent Mortgage Companies (like us). Most builders will require you to get pre-approved up-front before they start building your new home, and to provide them with a Pre-Approval Letter.

    If you are carrying the cost of construction with a true construction loan, these loans are most often done with small regional banks with specialized construction loan departments. This is who I suggest you use. The final "end loan" after the construction is done can be obtained from any mortgage lender, but of course we hope you select us here at Cambria Mortgage.


    Has your builder offered upgrades, appliance allowances, builder paid closing costs or other incentives if you simply use their lender for your financing?

    Caveat emptor, or buyer beware. Nothing is free in life, and YOU always pay.

    Many builders will work very hard, and employ just about every gimmick in the book to get you to use their preferred mortgage company, which most often is owned by the builder. Generally they will try to entice you with various things called 'builder incentives'. Common incentives are "free" appliances or upgrades, or that they will pay for some of your closing costs if you use their lender, but they won't if you use any other lender. That one works really well for them.

    Most big nationwide builders are the worst violators of phony incentives.

    So what is wrong with the builder incentive?

    They are almost always fake! While these builder enticements sound good to unsuspecting buyers, understand that nothing is free, and no builder is giving away anything.

    The actual cost of whatever they are offering you is either ALREADY PRICED INTO THE HOME if it is an upgrade, or built into a higher interest rate on their loan than the interest rate you could get from any other lender.  They use these fake incentive to entice, or lure unsuspecting buyers into using their internal or preferred lender, where they will make even more money off you, then just what they make from building the home.

    So what is wrong with using their preferred lender?

    Nothing, if in most cases you like paying higher interest rates than you would get using just about any lender not affiliated with the builder, or if you want to just feel like you got a free upgrade that was already built into the homes price.

    We commonly see clients pay about 1/4% higher interest rate using the builders preferred lender than using us. On a $400,000 loan, this amounts to about $60 per month higher payment. This amount to over $21,000 on a 30-year fixed loan. PRETTY BAD MATH.

    Builders make a LOT of extra money with these sales tricks. Sadly, all the home owner got was a higher payment, and a phony sense of getting a deal, when they actually got zero in return. It sickens me knowing people think their home is worth more than they bought it for because of the 'free finished basement' or other enticement that actually ins't real.

    It is illegal for a builder to force you to use their lender.

    Yes, it is illegal to 'force' someone to use a specific lender. This is why you bait you with phony incentives. The law states it is OK for a builder to offer an incentive, but it also says the enticement has to be bona fide (real). While government enforcement agencies know this is going on, it is hard to prove the phony enticement because of how easy it is for the builder to hide true costs in the construction costs.

    TIP: If you talk about using your own lender, and the builder fights hard to prevent it, this is a clear sign of the phony incentive game.

    How to fight back?

    A buyer can still get everything the builder offers in most cases, AND use the lender of your choice. You and your agent must be very strong willed, and willing to put up a fuss. At the end of the day, the builder still makes money building the home, so they do want to sell it to you. They just won't make as much money off you!

    No builder is giving away anything! They simply price the incentive into the overall cost of the home, then offer teasers to lure unsuspecting home buyers into their trap. Increase the margins on the home price by $20,000 – then give a buyer a $10,000 credit for closing costs by forcing a client to pay more with “their” lenders isn’t a deal.

    “There’s a sucker born every minute” - P. T. Barnum (1810–1891), an American showman.

    Most buyers would be better off telling the builder you’ll get your own financing and to cut the homes actual price to a no incentive price. Sadly, most new home buyers are blind from the glare of their shiny new object (the home) and end up smiling over the “deal” they received. Needless to say, the builder is left with a tidy profit.

    TIP: Other enticements, like this special price, or the free finished basement if you sign by this weekend - are also phony. Believe me, you can still get the same price and the same offers if you think about it and come back ten days later.

  • New construction loan application

    Our  Secure Online Mortgage Application is available 24/7. Cambria Mortgage does not charge any application fee or credit report fee to apply, and we will only move forward with your permission after reviewing all your options with you.

  • mortgage interest rate quote

    Complete our Online Mortgage Quick Rate Quote Form. This option allows our Licensed Loan Officers the opportunity to research current mortgage interest rates, refinance options and programs, then get back to you with our accurate quote.

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