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4quotesfast.com - New Construction Loans
New home construction is an exciting step for investors, but the
costs can be overwhelming. If you are planning on a building a house,
you will most likely need a construction loan. At 4QuotesFast, we
will help you choose the perfect lender that can make your dream
home a reality.
What is a Construction Loan?
Construction Loans are actually the first part of two phases. During
the construcation phase, interest is only charged on the funds that
have already been spent. Once the house is completed, the loan becomes
a more tradition mortgage program. The specifics, of course, vary
from project to project.
Does this Mean I have to Apply For Two Seperate Loans?
No. Many lenders offer "One Time Close" loans in which the Construction
Loan actually modifies into the permanent mortgage. This means you
will not have to worry about re-appraisals, re-qualification, new
paperwork, or additional closing costs. Your interest rate and monthly
payments can be set at the closing of the loan.
How will Lenders Know the Cost of My Home Before It's Even Built?
An appraiser and your lender will work together to determine the
worth of your unbuilt home. They will need to know exactly what
will be constructed, the materials that will be used and their cost,
labor costs, the cost of the land and it's value, and the cost of
plans and permits.
Things to Keep in Mind when Deciding to Build a New Home:
- Blanket Mortgages are a good way to start construction a new
home even when the old home hasn't sold yet.
- Be sure to consider the cost of rennovation and repair of homes
you're interested in purchasing. You might actually be able to
save money by building a new home vs. purchasing an existing home
and remodeling it.
- Often times, contractors specialize in building certain house
styles. Choose a general contractor who has built homes that most
closely match what you want your house to look like.
- Don't be afraid to do some research about a few different contractors.
Ask for recommendations from people who have had built their houses
and actually interview potential contractors.
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