Many of us are dreaming about our perfect house. In fact, we could have prepared specific designs. So, it should be a great time to consider putting our dream into real action. In current market, there are loans that are designed for aspiring home owners. Instead of looking for standard mortgage, we could choose to apply for construction loan, which allows us to build the house. By applying for loans to purchase the land and construct the house, we will no longer need to obtain another mortgage. The whole process should be less stressful, cost effective and simpler for any applicant. It is important to finance our custom-built house, before it is built; especially because we need to pay for materials, labours and taxes.
In this case, it is important for us to choose a proper builder and lender. We should look for the right partner during our custom house-building project. They should be able to share our vision and dream. In this case, it is a lot better for us to choose a finished lot. It means that road access, electricity grid, sewage systems and water are available. The land should also be recorded by the city and county. Lenders should be able to offer a wide variety of construction loan for us and we should investigate whether land is appropriate for construction. This will require us to build plans first and review land survey. Contractors that we choose should also be in the approved builder list. If we have a preferred builder who is still not listed in specific county or city, we should encourage them to submit the application.
This will make it much easier for us to get construction loan, especially if our builder is approved. Most architects and private builders can apply easily through lenders. There are different criteria for specific lender. We should be aware that homeowners may not be satisfied with the house that we have chosen. Many loan programs reject many builders and allow us to choose only their network-approved builder. This will give lenders more power over how the construction process of our house.
Lenders could require specific documentation and it is preferable to have high credit scores when planning to construct our house. We would need to offer specifications of our future house and its final plans. Purchase contract for the lot should also be given and if it is already purchased, we should prepare the settlement statement. We should provide property profile and material descriptions for our custom building. Costs should be itemized and broken down. There must be builder’s license and construction contract. There must be a document from the local county or city that allows us to build a house in the lot. It is also essential for people to obtain the required permit to construct the house. About 10 percent down payment could be needed depending on the amount of our loan. Smaller lot and house should require lower amount of down payment.