Texas Title and Escrow For Construction Loan
Adobe Title, LLC has the resources and the years of experience to serve you for Title Insurance And Escrow Closing services for Construction Loans Title Insurance and Escrow Closing Services. Since we have our own Title Plant the title process is done by our employees, who are located in Texas, and are available to serve your needs.
Construction Loans
In general there are several common types of Construction Loans. When an expected homeowner purchases a lot and gets a builder to construct the home or the property, he/she will apply for a contruction loan. On the other hand the builder itself would need the loan to construct the house on a land they own. In addition to these there are commercial property construction loans.
Construction Loan Process
Most commonly the process on a construction will follow a similar path regardless of the case. The process begins with the construction project preparation, plan and design by the architect. The homeowner and the contractor/builder then work with the architect to design the project. The outcome of the designed construction plan will be presented to the bank to start the financing options. The lending bank will provide the interim construction financing. Also, the homeowner will obtain a commitment to get a permanent financing after the construction project is completed. The permanent financing will pay off the interim loan, after the project is done. Usually the Title Company's involvement with the interim and permanent financing will be limited.
Construction Loan Title Insurance
The homeowner will sign a Mechanic's Lien Contract with the builder/contractor. The contractor will provide all the subcontractors’, suppliers’ business details with individual names and all other necessary information. This will ensure that every party involved will get compensated for their work individually. The general contractor will transfer the lien to the lending bank. Homeowner will initiate the interim construction financing with lender and executes an interim Deed of Trust with the bank. The Title Company will issue a mortgagee policy to the lender. The homeowner should get an owner's policy to protect his/her investment against any possible problems due to previous land owner liens or errors.
Construction Loan Escrow Closing Settlement
During the construction the contractor/builder will provide the homeowner periodic updates for draw requests and payments made to all involved subcontractors and suppliers. The homeowner will close a permanent financing with the lender after the completion of the construction project. The lender typically will require a proof that all the payments are made and final lien waivers are collected.
Construction Loan Title Policy
The title escrow officer will work with the homeowner and lender to prepare a preliminary report. Basically, the preliminary report consists of exceptions to the title insurance coverage. Its main purpose is to document and provide an interim response to a title insurance application. The preliminary report ensures that its sole purpose is the insurance company has no liability against the errors stated on the report. Thus any further actions or claims due to these errors must be executed under the title insurance policy. Title escrow officer will help to prepare plotting of recorded easement and other related document copies to determine any title insurance issues need attention before the loan application. Title escrow officer will also help to review all documentation and records working with the homeowner and the lending bank.
More about Construction Loans
Construction Interest Calculation HUD 
Texas Department of Housing & Community Affairs - Developers and Builders
