For many people, the idea of building a home from the “ground up” is appealing. Unfortunately, this same idea can cause a lot of stress due to financial restrictions that may come with your dream home. Luckily, there are different ways to find funding to build the house that you and your family deserve. One way to gather funding and get to planning is to consider a construction loan.
What is a Construction Loan?
In short, construction loans are short-term loans that you use to help finance building a home or another real-estate project. As a homebuyer, you may take out a construction loan to help ease the financial burden of a large project, such as building a home.
These construction loans are different from a home loan, however, in that home loans are usually given out as a lump sum. Instead, construction loans are given out in increments over a period of time while you build your house. They are also different from a home loan in that home loans only allow for an established property to be purchased.
Finding the Best Company
Many different companies offer construction loans, and it can be difficult to know if you’re looking at a quality company. Many use confusing language or are too vague for you to understand what they offer! There are a few ways to tell if you’ve found a good lender.
- Flexible loan amounts—Will the company work with the numbers that you’re looking for? Some set specific prices and terms. Is the company willing to negotiate?
- Quick confirmation time—Once they approve your loan, will you be able to get started right away? You don’t want to wait weeks or months to find out if you’ll be approved.
- Customer ratings—Is it possible to research and see what others have said about this company? Check to see what positive experiences others have had with the company.
- An established company—How long has the company been around? Loan companies that have been established for 10+ years prove with their track record that they do well and work well with lenders.
Researching with these ideas in mind will help you find a trustworthy and reputable company that will meet your needs and get you started on building your new life in your new home.