This list should be signed by the contractor and you and be made a part of the contract. Saying “A good kitchen will cost so many dollars per foot” doesn’t mean much when you go to the showroom at the end of the project only to find out that you hate what the construction loan budget has allowed for.8- As a part of the construction loan process the contractor will be asked to provide evidence of Liability Insurance as well as evidence of Workman’s compensation.He/She may very well not have Workman’s Compensation Insurance if he/she does not directly employ anyone.
Liability Insurance are a sure sign of trouble.9- As material costs are rising, payment of deposits on some deliveries may be required by suppliers and some construction loans will allow that. But be aware of the contractor who asks for up front money.10- Construction loan disbursements are made in stages. Never ever pay a contractor before your local county or city inspector has signed off on that stage. The lender’s inspector only verifies percentage of completion not compliance, so his approval does not mean that your local authorities will also sign off.
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