Home construction loans

There are a few types of home construction loans, but they all have advantages and disadvantages. It’s important that you know what the lenders is offering and what options do you have available.

One closing loan

It is also named “all in one” loan.

After the construction is finished, the construction loan becomes a mortgage loan. During the construction the borrower can make interest only payments that will apply toward the principal of the loan. All the options depend on the lender. You can receive a fixed rate or a floating interest rate that will be set during the construction process.

Modifying loan

There are a few options that make a modifying loan different from a one closing loan. In this case there are two interest rates. Also this loan carries two separate closing costs, one for closing the construction loan and one for closing the mortgage loan.

Two closing loan

This is a more flexible loan. It allows you to change the lenders. It is like a combination of a one closing loan and a modifying loan. There is only one interest rate. The lender has the option of having the borrower make interest-only payments or make payments that decrease the loan principal. After the construction is done, the entire amount of the loan is due. Then the user will need to secure a mortgage that will cover the remaining principal of the construction loan. The main advantage is that you can go looking for different lenders that will offer you a lower interest rate.

about construction loans, construction loan, home construction loan, home loan, home mortgage, loans, modifying construction loan, modifying loan, mortgage, one closing construction loan, one closing loan, two closing construction loan, two closing loan

Home and Garden How to destroy ants with non-chemical products Nowadays, everyone uses dish detergent and Borax, but only a few know that they are the cheapest... Home and Garden Building a rocking chair A rocking chair will help you relax after a hard day of work. if you even though of making one b... Home and Garden Main types of sofas and couches A sofa is usually the main attraction in a living room. Whether you want a traditional or a cont... Home and Garden Building a headboard for a bed When it comes to building a headboard for your bed, you can try something simple like an old doo... Home and Garden Popular home styles of the 1930s The beginning of the 20th century represented an important change in the architectural construct... Home and Garden 1930’s bedroom styles Bedrooms during 1930’s are not defined by a particular style. There were some factors that influ... Home and Garden Building a kitchen table Building a kitchen table is an easy and inexpensive process. Follow the next steps if you want t... Home and Garden Characteristics of the Duncan Phyfe furniture A carpenter and a designer, Duncan Phyfe can be recognized as one of the most popular furniture ...