There are those folks that march to their own drummers and for them, a cookie-cutter subdivision home just won’t do. These are the unique people who step outside the box in more ways than one and look to finance their dream home from the foundation up with Arizona home loans specifically designed to suit their needs.
Do I Need Construction Home Loans?
Many times, these adventuresome guys and gals are walking into uncharted financial waters where the more traditional type of mortgage won’t do. Quite often, they’re looking for financing for something where the ground hasn’t even been broken yet and in these situations, the construction loan is often the best bet to get the money to make their dreams a reality. Getting involved in a traditional mortgage is a big step—taking on one of these construction home loans has a different set of qualifications you should be aware of before you sign any of the documents to get that first spade of dirt turned over.
Nothing built yet?
First off, it’s important to understand that because there’s nothing built when you apply for the money, these loans are for a much shorter time than their traditional counterparts. Generally, the time frame banks and other lending institutions set aside for these loans is up to one year. They usually have variable rates that can go up and down with the prime, and getting a construction loan often hinges on your having a solid banking history the lender can look at to gauge your risk. Here’s a quick tip about the timetable. Mother Nature and those supplying labor and materials don’t always play by your schedule, so it’s a good idea to work out some provisions for delays into the process, just in case.
There are a few other details that can make or break your acceptance or rejection and one of the most important is a timetable you’ll need to present. Like the name suggests, construction home loans are about asking for the money to build a structure. That means the people who are considering putting up the cash will want to see a budget, detailed plans and of course a timetable that tell them when they can expect to get their money back. It’s important to deal with only qualified builders that have a good reputation and all the necessary licenses and accreditations.
Things are often more concentrated with this type of loan. After being accepted, the money comes as a draft that the person building the place can draw on and it’s normal the flow of cash follows the construction benchmarks with money being released as these stages are reached. As your dream home gets built, you’re usually only required to make interest payments on the loan.
After you get the house built with these specialized types of Arizona home loans, the time comes where you can settle into your new life and your construction loan rolls over into a traditional mortgage loan. This happens when a certificate of occupancy has been produced and the contractors have all been paid in full. After that, you can enjoy the personal satisfaction of enjoying your dream you’ve financed from concept to completion.