what exactly would a purchase agreement look like in a residential construction loan and say?

Answer 1

ttPawPaw you are wrong. There certainly is a document for a construction loan. It IS a contract or agreement .It is very complicated to explain but I will try. You apply for a construction loan the same as any other mortgage with the credit checks etc. You will be approved for an amount of money after the bank gets info on the appraisal of the home to be built and your credit. You will put a down payment on it also as usually they don't give 100% of the amount the home will cost. You will lock into an interest rate also.The difference lies in the payments. A construction loan usually expires at the end of a year when the newly built home is about 95% complete. During the building process the builder draws from the loan about 8 to 10 times. Each time an inspector from the bank will go out to the site and then approve the amount of work for x amount of dollars. You begin interest only payments on the amount that has been borrowed totally month by month. Say the builder takes $40,000 of a $350,000 construction loan the first time. You will only pay for that amount each month until he takes the second "draw. . Say after 3 months he takes the second draw and it's $25,000. Now you will be paying on $65,000.
The builder will continue to draw until he has completed the home and taken all the money.Once the certificate of Occupancy has been given to the buyer the loan will then close. Usually people take out a loan like this until they sell their home and use the equity to pay it off. If their home doesn't sell by the time construction is done you will have to close anyway. Unfortunately you will be paying the interest and principal on the full amount.
Once you get the money to put into the loan you will "recast " that construction loan and then pay on the balance. The actual document is many pages just like a regular mortgage. In addition, however, there are sign off sheets for the builder to take his money. You sign these each time the builder puts in a request.Your lawyer will also take part in this along with the bank.
I think the best thing to do is make an appointment with a lender and have them walk you through it.
We used Citizen's Bank/CCO Mortgage.
There might be slight variations from bank to bank.
Good luck to you!:)

Answer 2

You are talking two different documents. The purchase agreement is between the seller and the buyer. The loan agreement is between the lender and the buyer. There is no such thing as a standard document.pp