how hard is it to get a new construction loan compared to a regular home loan?. I am a first time home buyer and I am thinking about building. How do the interest rates and other things compare? what are the pros and cons? Thanks.

You need to own the land flat out and have 25% down.

Since you only pay interest on the amount you have already spent during construction and the interest rate is low this is a lot cheaper.

HOWEVER, you have a dead line to finish building and you have to meet it. If you don’t the fines are astronomical. You not only have to finish building, but refinance to a conventional loan. A lot of people screw up and can’t qualify and loose their new house at this point, because if you do not refi that it is, the construction loan bank comes in and forecloses.

No tags

No comments yet.

<< Construction loans and First-Time Homebuyer Tax Credit 2009?

Fast hard money loans in Georgia >>