US Construction Loan
US Construction Loan is designed for US citizen who wish to build their own house.The loan process is more complicated if compare with ordinary home loan, there are a lot of paper works involved.
Every Construction Loan is unique, it's involved cost of materials, duration to build, credit rating & track record of borrower and many aspects. If you still thinking of building your own home, please refer to the following tips :-
1) First of all you should find a local bank or financial institutions, liaise with the representative of the bank. Make sure he is experienced in dealing in Construction Loan, many unseen problem tend to be happen if without much experiences.
2) Get the pre-approve option from bank, this will enable you plan a proper budget at the construction cost. Inform clearly to bank that whether you will staying your own or just an investment, they will recommend the appropriate loan options to you.
3) As normal home loans, the construction loans available in fixed rate and variable rate option. Choose the option based on your personal circumstances, confirm with the bank is there any rate increment when conversion of construction loan to mortgage loan.
4) Prepare a well written construction contract with builder, clearly outline the responsibility of them. Considered the amount the builder expects to receive and is there any contingencies (for instance, contingent upon go through an inspection).
5) Bank / lender will required borrower purchase the relevant insurance policies such workmen compensation, all risks & etc. The loan might included this cost at preliminary stage. If the cost of insurance is not great, is better to spend from your own pocket.
6) Should you have any doubts, please consult the real estate attorney .
For more information about other loans, please check out Various Loans Guide instead of US Construction Loan
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