Residential construction loan is a type of mortgage service that can provide you with the necessary funds to build your own property. These loans differ from regular mortgages and have specific characteristics that ought to be taken into account prior to filling any kind of loan application.
There are lots of residential construction loan that are offered by banks & financing companies. You have to choose one of them according to your need. If you choose the owner builder loan, this means you are acting as the general contractor and you are solely responsible for the construction getting completed on time and within budget.
Everyone thinks to have his own home. But cost of home is a big problem and not everyone will have so much money to purchase directly a home by cash. Then residential construction loan is the best solution. For getting construction loan, it is always a good idea to pre-qualify for a construction loan. The process to pre-qualify takes into consideration your credit record, any down payment you can make, the type of loan you want, and the current market value of homes. If you pre-qualify, you will know up front the amount of home you can afford to finance and build.
Depending on your loan requirement, it is necessary to choose the best mortgage broker. The mortgage broker will assist you to understand the terms & conditions of each & every deal. There are different types on construction loans. Many are based on a six-month or one year plan, which means they will be completed within that time frame. Some allow you to lock in your interest rate at the lowest rate, and others are variable interest rate loans, which mean the interest rate changes with the market. Other construction loans are called bridges loan. It is a loan type that allows you to use equity from your current home until your new one is finished. Many require interest only payments until the house is completed; at which point those payments are due.