New Home Construction Loan
New 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 it’s a time to give up your tensions and to know something
very interesting which can make your dreams possible .i.e. New
Home Construction Loan
MEANING OF HOME CONSTRUCTION LOAN: Home construction loans 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.
New Home Construction Loan has 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 it’s a story loan, therefore it is not
standardized like mortgage loan or any other loan.
Same as in other loan, New Home Construction Loan also have
different interest rate depending upon the needs and situation.
New 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 New Home Construction
FINANCING PROGRAM OF HOME CONSTRUCTION LOAN: Lenders generally
finance New 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 New 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 New Home Construction Loan becomes permanent at
the end of construction period which results in only one set of
TYPES OF CONSTRUCTION
• APARTMENT CONSTRUCTION LOAN
• COMMERCIAL CONSTRUCTION LOAN
• MEZZANINE 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 New Home
Construction Loan, so it’s a right time to contact with New
Home Construction Loan lender and make your dream possible