What Does the Rest of the Year Hold for Home Prices?
Whether you’re a potential homebuyer, seller, or both, you probably want to know: will home
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Construction Only & Construction-to-Permanent
A home construction loan is a short-term, higher-interest loan that provides the funds required to build a residential property.
Construction loans typically are one year in duration. During this time, the property must be built and a certificate of occupancy should be issued.
If you are considering a New Construction loan, it is important to speak with one of our loan specialists to see if you are eligible and to compare the benefits and drawbacks of this type of loan against other types of loans.
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A construction-only loan provides the funds necessary to complete the building of the home, but the borrower is responsible for either paying the loan in full at maturity (typically one year or less) or obtaining a mortgage to secure permanent financing.
The funds from these construction loans are disbursed based upon the percentage of the project completed, and the borrower is only responsible for interest payments on the money drawn.
Construction-only loans can ultimately be costlier if you will need a permanent mortgage because you complete two separate loan transactions and pay two sets of fees. Closing costs tend to equal thousands of dollars, so it helps to avoid another set.
Another consideration is that your financial situation might worsen during the construction process. If you lose your job or face some other hardship, you might not be able to qualify for a mortgage later on — and might not be able to move into your new house.
Also known as a One-Time Close Loan.
With a construction-to-permanent loan, you borrow money to pay for the cost of building your home, and once the house is complete and you move in, the loan is converted to a permanent mortgage.
Buyers are eligible to purchase with as little as 3.5% down payment. The benefit of the construction-to-permanent approach is that you have only one set of closing costs to pay, reducing your overall fees!
Once the construction-to-permanent shift happens, the loan becomes a traditional mortgage, typically with a loan term of 15 to 30 years. Then, you make payments that cover both interest and the principal. At that time, you can opt for a fixed-rate or adjustable-rate mortgage.
Whether you’re a potential homebuyer, seller, or both, you probably want to know: will home
If you tried to buy a home during the pandemic, you know the limited supply
There’s no doubt about the fact that the housing market is slowing from the frenzy
When the pandemic hit in 2020, many experts thought the housing market would crash. They
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