Showing posts from April, 2005

How Construction Loans Work

There’s probably nothing more challenging and fun than building your own home. It helps to understand how your lender sees you and your project: they want you both to succeed!

Whether you intend to build your own home or hire a professional architect or builder, you need to know a few facts about your project before you apply for a Construction Loan: 1.The specific time frame required to build your home, 2. How much equity (cash and/or land) you are bringing into the project, 3. How much it will cost to build your home, and 4.Liquid assets you will need (to live & operate) during your construction period. Naturally lenders have higher credit standards for complex projects. This is NO place for the first time homeowner.

Your Home Building Team
At the outset, whether you are designing your own home or hiring a home designer, you will need to find a lot suitable to your needs and design. A realtor working your architect or builder is a great asset. Working with a designer or selecting a…

Custom Construction Loans

Construction Lenders offer a range of funding options for Owners, Owner/Builders and Investors of 1-4 Unit Residential Dwellings for up to $6 million dollars.
It wasn't so long ago that if you wanted to build your own home, you had to first either buy your land or get a lot loan, then get a construction loan, pay the closing costs, build the home, and then refinance the whole kitandkaboodle into a mortgage = 3 hassles and 3 sets of closing costs!
Custom-Perm Loans (1- Step, 2-Step or One Time Close)
Custom Construction loans are designed to allow a home owner or investor to custom build a home and cover the cost of land, design fees, contractor(s) and other hard costs in one loan.
After the Construction Term (4 months to 2 years) is finished, your loan is then converted or ‘rolled over’ into a Permanent Mortgage. There are no closing costs when you convert from the construction phase to your permanent mortgage unless you change lenders.
Interest payments may be rolled into the loan so …