Home Construction Loan
Home Construction Loan
Every person in his/her life has
different dreams and they always strive hard to make their dreams
possible in one or other ways. But a common dream which every
person has is to build a dream house. Now arises a question that
how to make it possible?
So, now its a time to give up your tensions and to know something
very interesting which can make your dreams possible. i.e. home
Meaning of home construction loan: Home construction
loan are a
loan used to make your dreams possible by making home
improvements, new home construction or renovations. In this way,
the construction loan is a good real estate investment leading to
profits upon the future sale of the home. Real estate property
value generally tends to rise over time.
Home construction loans have a concept of story loans. That means
that the lender has to know the story behind the planned
construction before they're willing to loan you money. Because as
we know its a story loan, therefore it is not standardized like
mortgage loan or any other loan.
Same as in other loan, home construction loan also have different
interest rate depending upon the needs and situation. A home
construction loan typically requires interest-only payments during
construction and become due upon completion. Completion for
homeowners means that the house has its certificate of occupancy.
Your interest rate and period of loan totally depends on the stage
of construction of a home.
As it is highly difficult to obtain home construction loan,
therefore there are two ways of financing home construction loan.
Financing program of home construction loan: Lenders generally
finance home construction loan in two ways:
Two steps or prime based construction loan program.
One step or lock and build program.
A short description of financing of home construction loan:
A two steps or prime based construction loan means that you use
two loans, first a construction loan for the period of
construction, and another is a permanent loan from another lender,
which helps you to pay off the construction loan. Two steps
construction loan means that you shop twice and incur two sets of
closing costs. And one step or lock and build construction loan,
means that home construction loan becomes permanent at the end of
construction period which results in only one set of closing
TYPES OF CONSTRUCTION LOAN:
Apartment construction loan
Commercial construction loan
New house construction loan
Partly home construction loan
FOLLOWING STEPS TO MAKE POSSIBLE YOUR DREAM LOAN:
Required to provide your plans, specifications and expenses in
regard of your home construction.
Prior to your disbursement of funds it is essential to provide a
copy of building permit and hazard /builder risk insurance.
Either a title company or settlement attorney will handle your
Through your construction process it is required to meet you
As there are lots many option available for Home Construction
Loan, so its a right time to contact with Home Construction Loan
lender and make your dream possible very soon.