What Are Construction Loans?
If you cannot find the right home to buy, you might be thinking about how much it will cost to build a new house or renovate the one you currently call home. The process of borrowing the money to pay for this project is different from getting a mortgage to move into an existing property.
A construction loan is a short-term loan that covers only the costs of custom home building. This is different from a mortgage, and it is considered specialty financing. Once the home is built, the prospective occupant must apply for a mortgage to pay for the completed home. Construction loans typically are one year in duration. During this time, the property must be built, and a certificate of occupancy should be issued.
Some things to consider:
- Check your credit score first
- Ask for a reputable builder
- Depending on the loan type, consider what down payment you may need.
At American Financial Network, we offer multiple types of Construction Loans, including FHA, Renovation, and USDA. If you decide to go with a construction loan, make sure to reach out to one of our Loan Officers to learn more and decide what is best for you.
American Financial Network, Inc. is not acting on behalf of or at the direction of the federal government, and this offer is not being made by an agency of the government. Programs not available in all areas. Additional terms and conditions may apply.