How To Finance Your Custom-Built New Home
Buying a home is one of the most valuable investments you’ll make in your lifetime. It is also one of the most expensive. Taking the additional step of constructing a custom-built home may seem like an even more daunting task when you consider the financial aspects. You may even find yourself questioning whether building your new home is worth it. If you’re dealing with these challening emotions, we’re here to tell you that creating your dream home is absolutely worth the effort. We also want to share some helpful info with you about financing your custom build.
Most Americans finance their home acquisitions with loans rather than rely on their personal savings. Let’s begin this post by looking into the construction loan options you can consider. The following post explains what they are:
The Basics of Construction Loans: Buy Land and Build
Mortgages are easy to find, but there’s usually a catch: you can only borrow money to buy a place that already exists. Construction loans are different because they can fund everything needed for a new home, garage, or business structure. They can also work when renovating or buying land (if you don’t already have it).
Note: Construction loans are less popular than standard home loans, but they are available from numerous lenders. If you’re thinking of building, learn about the basics and find out how each lender handles the specifics. Read more at The Balance…
There are numerous financiers who offer construction loans, so your most important task is choosing the best one for your particular needs.
There are also several ways to service your construction loan. Before deciding on any option, you need to understand the pros and cons. Read the post below for details on one of the options:
Types of Construction Financing
After your new home is finished, you will need to get a more traditional type of loan, such as a 30-year mortgage. This new loan will pay off the construction loan, and then normal payments will start.
Two large loans within one year might sound overwhelming. However, there are two options to choose from.
One-Time Close Loans
The first option is a one-time close loan. This is also known as an ‘all-in-one’ or ‘construction-to-permanent.’ It combines both a construction loan and a standard mortgage into one deal. At the time of signing, a maximum mortgage rate is set. As soon as construction ends, your loan converts into a long-term standard loan. The new loan pays off the outstanding balance, and you begin to pay on your standard loan.
Let’s look at the pros and cons of this type of loan option. Read more at Supermoney…
Do extensive research and get a financial expert to help you look into each of the viable options. This way, you’ll know what to anticipate.
It’s also advisable to learn from others who have gone ahead of you on the same journey. Their experiences could help you avoid mistakes and make the best decisions. The following post gives such a story:
What I Learned About Mortgages When Building a House
When my husband and I started our search for property in 2010, we ultimately determined building our own home was our best course of action. We found a builder we loved quickly and were ready to get started. Of course, like most Americans, we needed to borrow to cover the costs of our house — and that’s where the process got complicated.
As a personal finance writer, I’ve long been familiar with the process of getting a mortgage — but was surprised to discover that there’s a whole added layer of complexity when you need a loan for building a home rather than buying a finished house. The challenges arise because you need to come up with money during the construction process, before your home is completed. Read more at The Ascent…
Once you settle on the financing option that works best for you, ensure you get value for your investment. There’s no better way to reward yourself than getting the perfect custom-built home. This means working with the best custom builders around.
If you’re looking to build in the Fort Mill, SC area, that means working with Oz Custom Home Builders. We will walk you through every step of the home building process. Our experienced team will make sure that you never feel overwhelmed or caught off guard. We will bring your vision to life, building the luxury home that your family will enjoy for generations. Call us at (803) 242-0050 to discuss your dream home, or fill out the contact form on our website and we’ll get back with you.