Over the last 53 years building homes in central Oklahoma, we've done business with dozens of banks. Some have been excellent to deal with, from both the builder and customer perspectives, some have been OK, and some have been downright difficult if not incompetent. Since getting a construction loan to build a new house is a key element of building a home on your land, whether it's in Oklahoma or somewhere else, I thought it would be helpful to share what I've learned.
Construction loans for building a home are different from other types of loans. Many bankers will tell you they'll do a loan to build a new home, but not that many are actually good at it. You can ask the banker what title company they use, if they have a list of preferred appraisers, and who does the progress inspections... If they can't give you a ready answer, they might not really be that good at construction lending, and using a bank like that will lead to delays and frustration.
The best banks in Oklahoma City for construction loans will be the ones that have a dedicated team for just that purpose.
Oh, and please don't use interest rate as your guiding principle. There are so many other factors, and there won't be much difference in rates anyway. When you calculate the actual dollar difference, you might find you're stepping over dollars to get to pennies.
In Oklahoma City and surrounding areas, here are the top 5 construction lending banks (in my humble opinion):
- 1. Valor Bank. This is an old, established rural Oklahoma bank under new ownership. The new ownership consists of talented and experienced bankers looking for new opportunities, and their construction lending department is top-notch in customer service, honesty, and follow-through.
- 2. F&M Bank (and FMB Morgage). This is a family-owned bank with years of experience in construction lending. For years, I dealt with Chad Johnson in the Crescent branch, but they've recently re-worked their internal systems to make their customer experience even better.
- 3. Advantage Bank. While not a large bank, Advantage "gets it" when it comes to lending money to build. One unique element is Advantage doesn't have its own mortgage department (as of this writing), so they do business with many mortgage companies around town. This network of connections can help you if for some reason you want to separate your construction business from your mortgage business.
- 4. Tinker Federal Credit Union. TFCU, like others on this list, has been doing loans for customers to build new homes for years, and is very familiar with the more rural projects.
- 5. NBC Bank. We haven't done a great deal of business with NBC, but what we have done has been very smooth for our clients and for us. The loan officer we do business with at NBC has a deep background in construction lending from another large Oklahoma bank, so she knows what she's doing.
For more articles about construction loans, please check out these articles:
Are you getting the right construction loan?
Financing your custom home doesn't have to be scary
Home construction loans: choosing the right bank
Also, please feel free to download our guides that contain lots of hints that will help you on your journey to building your forever home on your land.