The size of your permanent loan should be determined within the context of your entire financial picture. Between savings and the loan, you must have enough money to cover the entire cost of the project plus any overages. More than 25 percent of projects run over budget by as much as 30 percent. If you run out of money, you can expect to pay high fees for additional cash, if it's available at all. Your project could fall to foreclosure.
Construction loans are just like any other home loan.
The best loan has the cheapest rate and fee. When you purchase or refinance a home the process is over when the loan funds. A problem in this area could cost you months, thousands of dollars, maybe even your project. The variables in qualifying for a construction loan are 10 times that of purchases and refinances. I have to sell my home and rent before I can start building my new home.