Break new ground with a construction or renovation loan
Just as you trust skilled, experienced builders for your home renovation, trust Westerra to bring that same level of expertise and confidence to your mortgage. Whether it's a kitchen update or a brand-new build, we're here to help make your money work as hard as your contractors.
Should I apply for a construction loan?
A home construction loan is your best bet if you’re building a brand-new home or doing major renovations. The loan can cover everything from the purchasing of land, permits, plans, labor, and materials, all the way down to those final closing costs.
What about a renovation loan?
Go with the renovation loan for smaller home renovation projects on your existing home. From cosmetic remodeling to room additions and more, you can spend less time worrying about your loan and more time worrying about picking out the perfect tile color.
The details on construction loans
If you’re looking to modify your current home or buy new land to build on, a construction loan might be the right choice. Other places may make you take out separate loans for your construction financing and permanent mortgage. Here, we can combine them in a Construction-to-Permanent loan, making for one easy, hassle-free loan transaction.
The details on renovation loans
A renovation loan can help fund your home improvement project on your primary or secondary home. We’ll number-crunch the loan based on the completed value of the project, and we’ll base the purchase on the combined sales price and cost of renovation, or as completed value. For a renovation loan, you won’t have to pay PMI on the loan if you have a loan-to-value ratio that’s less than 80%.
Your dream home awaits...
By choosing Westerra, you’re not only choosing a lender who gets Colorado, you’re choosing to work with real human beings who understand the specifics of building or renovating in your area. Whether you're dreaming of building on land suitable for chickens and highland cows, or creating your new snowboarding getaway, our construction loans have you covered. For those looking to add value to their existing home, consider a renovation loan for projects like a cozy reading nook, a functional home office, or expanded living space. If you've mastered the art of making sourdough starter, you can turn your dream home into reality. You're closer than you think.
Construction and Renovation Frequently Asked Questions
A construction loan is a short-term loan used to finance the building of a new home or major renovations. It covers costs such as land purchase, permits, plans, labor, and materials. At Westerra, we offer Construction-to-Permanent loans, combining construction financing and permanent mortgage into one hassle-free transaction.
Yes, we do! We provide loans for vacant land if you plan to build a home on it in the future. We can finance both developed and undeveloped lots up to 5 acres. The land should be easy to sell and have good sales data from similar properties. We don't offer loans for land meant for fun or farming. For undeveloped land, you can pay off the loan over a maximum of 15 years.
A Construction-to-Permanent loan allows you to finance both the construction phase and the permanent mortgage with one loan. This means you only go through one closing process, and your interest rate is locked in from the start. Once construction is complete, the loan transitions into a standard mortgage.
Flexible Financing: Covers land purchase, permits, plans, labor, and materials.
One-Time Close: Combines construction financing and permanent mortgage. This reduces your cost and provides peace of mind!
Interest-Only Payments: During construction, you only pay interest on the funds used.
DIY work is generally not allowed for construction loans. Professional standards must be met, and the work must pass final inspection to receive a certificate of occupancy.
A renovation loan allows you to purchase a property or refinance an existing loan and include funds to cover the cost of repairs, remodeling, renovations, or energy improvements. The loan is fully disbursed at closing, with renovation funds held in an interest-bearing escrow reserve account for draws to be paid directly to contractors or subcontractors. We will determine the loan amount based on the completed value of your renovations.
Renovations must be completed and funds fully disbursed within 12 months. For loans with mortgage insurance, the timeline is six months. Principal, interest, tax, and insurance payments commence as normal during this period.
Yes, the “do it yourself” option is available for renovations made to one-unit properties by the borrower. However, DIY labor costs may not exceed 10% of the “as completed” value of the property. Borrower-performed labor must be included in the costs to ensure project completion if the borrower does not perform. Sweat equity is not allowed, and the borrower must document their ability to perform renovations. Work requiring a trade skill must be licensed.
Eligible improvements should be permanently affixed to the real property (either dwelling or land). Exceptions include certain appliances installed with kitchen and utility room remodels. Renovation funds can be used to purchase appliances as part of an overall remodeling project that includes substantial changes or upgrades to the rooms where the appliances are placed.
Yes, renovation funds can be used to construct various outdoor buildings and structures allowed by local zoning ordinances. These buildings and structures must comply with applicable building codes for the local area.
High Financing: Up to 97% of the completed project value.
No PMI: If your loan-to-value ratio is less than 80%.
Value Addition: Fund projects that enhance your home's value.
Loan approval is subject to credit approval and program guidelines. Credit Union membership required. Interest rate and program terms are subject to change without notice.
*Annual Percentage Rate (APR) is the cost of the loan in percentage terms, taking into account various loan charges such as Prepaid Finance Charges (discount points, processing and underwriting fees, flood certificate, tax service, closing and wire fees, prepaid interest) and Private Mortgage Insurance (if applicable). Refi scenarios based on rate and term transaction, 760+ FICO, $400K or $900K (Jumbo) loan amounts at 60% LTV. Purchase scenarios based on 760+ FICO, $500K or $900K (Jumbo) loan amounts at 60% LTV. Variables such as LTV, CLTV, credit score, cash out, occupancy and property type, etc., could affect rate and APR. Rates are based on individual credit history and are subject to change without notice. Rates are for conventional-conforming loans only. Other rates and terms may apply for Jumbo and nonconforming/specialty portfolio programs. Please contact a Westerra Credit Union Mortgage Loan Officer at 303-321-4209 for more details. Westerra Credit Union NMLS 421606.
