How To Get The Construction Loan You Need

How To Get The Construction Loan You Need



How to​ Get the​ Construction Loan you​ Need
Being able to​ move into your new house is​ a​ great day .​
Knowing that you​ got the​ right construction loan to​ do it​ will help you​ sleep at​ night after you​ move in​ .​
With so many choices available today,​ it​ could be difficult to​ know where you​ should start looking and what features are the​ best .​
Here are a​ few tips for you​ to​ enable you​ to​ find a​ good deal on​ your construction loan .​
The first thing you​ will need to​ do is​ to​ find out from a​ lender exactly how much you​ are able to​ obtain for your financing .​
After you​ know that figure,​ then you​ will understand how much you​ have to​ spend toward the​ whole project .​
You should also have a​ real good idea what additional costs there will be such as​ closing costs and other expenses needed to​ provide the​ house with all utilities,​ too.
After that,​ it​ comes time to​ select a​ home design .​
After choosing a​ general plan,​ you​ need then to​ talk to​ an​ architect and contractor .​
The architect will charge a​ rather hefty fee to​ adopt the​ general plan to​ your specific design,​ so you​ should know what it​ is​ and how many revisions it​ will give you​ .​
After talking with them and getting your plans drawn up,​ this will give you​ a​ near accurate representation of​ what it​ will cost to​ build your dream house .​
After you​ have your figure,​ you​ will need to​ go back to​ the​ drawing board and redesign your house - especially if​ it​ costs more than your budget allows .​
After your plans are finalized,​ then you​ can approach your lender for the​ construction loan .​
He (or she) will require these plans before you​ are given any money .​
Keep in​ mind that a​ preapproval (which is​ often free) is​ not the​ same thing as​ having the​ construction loan .​
You should learn all you​ can about the​ construction loan options available to​ you​ .​
It is​ easier if​ you​ have a​ construction loan that is​ convertible to​ a​ permanent loan .​
This will enable you​ to​ save some money and will be easier to​ obtain because it​ will be from the​ same lender .​
Be sure you​ have this feature in​ your contract .​
Construction loans will usually require a​ Downpayment of​ 10% in​ order to​ qualify .​
a​ Downpayment of​ 20% will be required in​ order for you​ to​ not have to​ pay private mortgage insurance .​
Another way to​ avoid PMI,​ is​ to​ piggyback your loans .​
This means getting a​ first mortgage for 75 to​ 80%,​ and then taking out a​ second mortgage for the​ balance of​ 20 to​ 25% .​
When it​ comes time to​ change from your construction loan to​ a​ permanent loan be sure that you​ are aware of​ the​ trends in​ interest rates so that you​ will understand whether it​ would be better to​ get an​ adjustable rate mortgage or​ a​ fixed rate mortgage .​
It is​ also possible to​ have a​ small cash flow on​ some mortgages that will allow you​ to​ make some additions to​ your new home.




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