when building a home do you do the same as mortgage with a new house?
Home Mortgage
toolate asked:
is there a closing before u build? do you the payments start as soon as they break ground? i want to build a new house but i dont even know the basics to begin.
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is there a closing before u build? do you the payments start as soon as they break ground? i want to build a new house but i dont even know the basics to begin.
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February 12th, 2009 at 9:01 am
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You need to do a construction loan for the home that you are building.
February 13th, 2009 at 4:34 pm
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No, you close when it’s finished. You get a building loan at first.
A Building Loan is a short-term mortgage loan used to finance the construction of a dwelling or additions or improvements to an existing dwelling.
February 13th, 2009 at 9:27 pm
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you get a construction loan, a payment and building schedule and they convert it to a mortgage when complete.
February 16th, 2009 at 10:33 am
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They have what they call a Construction loan. Sometimes it can move from a construction loan to a conventional mortgage, but some don’t.
Search Home loans and read up on the different types. There are sooo many.
February 17th, 2009 at 1:17 am
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First, get a good builder and a good attorney, not necessarily in that order. Yes, you will have a mortgage (first a construction loan) unless you can pay cash. The terms of your mortgage will be up to your mortgage lender. Your loan will convert from a construction loan to a mortgage when the house is completed. You will need to put down money before beuilding commences. A closing is a closing is a closing; they are all the same. Again, consult a real estate attorney, an agent, and a builder. They will be able to fill you in further.
February 20th, 2009 at 12:37 pm
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You don’t ALWAYS have to do a construction loan. I’m building 2 homes as we speak. One with and one without a construction loan. A construction loan gives the builder money to use as needed for building as you just pay the interest on it (some builders even pay the interest for you). Regardless of scenario, you are always given an ‘idea’ of what your payments will be (good faith estimate) which is usually lower then the final rate! Good luck !
February 21st, 2009 at 12:52 pm
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If you have a builder, he carries the construction loan and you take an end-loan subject to the “as will be” value of the hse. When completed, your mortgage pymt start 30 days after closing. This is best option for you since the construction phase has the highest risk to a bank and it is easire and better for the construction financing to carried by the builder..he has the experience/insurance etc and can get a better rate anyhow…..in this scenario thebuilder carries the risk during the construction phase…
If you carry the construction loan, the pymts starts 30-days after the closing of the construction loan and convert to permanent mortgage upon completion of the hse……in this scenario you will carry the risk during the construction phase…