What are home construction loans?
Building a brand-new home to your exact specifications may sound like a dream come true, but home development can get pretty complicated, especially if you need to take out a loan to pay for it.
From good credit, to construction timetables, the Mortgage Network has experienced loan officers who can help you through everything you need to know about home construction loans. A construction loan is a short-term, interim loan to pay for the building of a house. As work progresses, the lender pays out the money in stages. There are also options for one-time construction loans that include the cost of the lot, construction and permanent mortgage combined into one loan and one loan closing.
Construction loans are typically short term with a maximum of one year and many times will carry variable rates that move up and down with the prime rate. The rates on this type of loan are higher than rates on permanent mortgage loans. To gain approval, the lender will need to see a construction timetable, detailed plans and a realistic budget from the builder of your choice.