If you’ve ever thought about building your own home, talking to Ravi is the first step. Imagine the many advantages of being able to design and build a home that is perfect for you! Ravi can help you navigate the somewhat more complex process of getting financing.
Getting a mortgage for a home that is being constructed from the ground up, is different than a traditional mortgage for an existing home. The reason for this is that the collateral, or loan guarantee for the lender, is primarily the home itself. Therefore, lending you hundreds of thousands of dollars before the home or collateral exists, is a very high risk for the lender.
But never fear! As Ravi says, be open to new possibilities! You can get a loan to build your dream home, and we can help.
The major differences between a building-a-home and buying-a-home loans are that you will likely require more of your own capital (similar to a down payment) and, when you are building, the lender only provides funding at intervals, based on how much of the home is built. For example, the first installment of money is loaned when the exterior is complete, allowing the doors to be closed and locked (called “lock up”); the second installment when only finishing remains; and the final installment when construction is complete.
At each phase, an independent inspection and appraisal are required to assure the lender that collateral value exists. That’s why it’s critical that you structure your agreement with the builder for your payments to them, to coincide with the loan installments.
Because of the additional risk, getting a building or construction loan is more complicated and requires additional documents and verifications, but we’ll walk you through every step and get you the best interest rate possible.
Take the first step by calling Ravi right now!