How to Get a Construction Loan to Build a Garage

Building a new garage may require financing.

Whether you want to add a connected garage to your home or build a stand-alone garage, you may want to obtain a construction loan to finance the project. Generally, traditional lenders that offer construction loans do not offer financing specifically for the construction of a garage. You can, however, obtain an equity loan, do a cash out refinance on your existing home mortgage or obtain a personal loan to gather the funds you need to build the new garage.


Step 1

Calculate the cost of building the new garage. Determine how much money you need to borrow, calculate an estimate. You can obtain garage-building plans from online companies, your local home improvement store or from a local garage-building contractor.

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Step 2

Compare the cost for building the garage with your personal savings. Compare the estimate of your cost with the amount of money you have in your checking, savings or other accounts that you intend to put toward the cost of building the garage. Subtract your personal contribution from the total cost to determine the loan amount you need.


Step 3

Contact your current mortgage company. Review the options for obtaining the money you need to build the garage. Choices include: a construction loan -- although this is generally for the home construction with a garage only, a cash out refinance or a home equity loan or line of credit.

Step 4

Review the options and then compare the options with other banks and financial institutions. Compare any up-front costs associated with obtaining the money you need to build the garage, the interest rate on the loan and the term of the loan.


Step 5

Choose the loan option that is best for you. Pick the loan that offers the best terms and conditions.

Step 6

Obtain an application. Contact the lender of your choice and obtain a loan application package. The package should have a list of documents you must submit with your loan application.

Step 7

Complete and submit the application. Fill-in each line of the application and submit the completed application along with a copy of the requested documents.


Step 8

Attend the closing on the loan. Once the loan is approved, a closing date is scheduled for you to sign the loan documents and obtain the funds you need to build the garage.


One of the largest costs of building a garage is the labor. Costs for wiring the garage for electricity and adding a garage door opener are other costs to consider when calculating the cost of building the garage. If you are building a home with a garage simultaneously, then you can include the building of the garage along with the building of the home and obtain a construction loan for the entire project. A construction loan application is similar to a standard mortgage application, although you have to supply building plans and builder information along with the application to the mortgage lender.

Things You'll Need

  • Calculator (optional)

  • Garage building plans or building kit price list