Things to know about financing your dream!

One of the biggest hurdles to get over when you are wanting to build a new home or cabin is financing. There are many ways to finance but the most common is the conventional construction loan. I am going to give a brief  description of the steps required. The process can be very frustrating and seemingly impossible at first but we can help you through the pit falls.

• The first step in acquiring a construction loan is getting pre-qualified for your long term financing. If you call our office we can give you the names of people to call at various institutions for your long term financing. By long tem financing I am referring to your conventional 30 year mortgage.
• Once you have been pre-qualified for X amount, you can apply for a construction loan. The bank will give you a packet of endless paperwork that we can also help you with.
• It is important to note that the bank will want you to have some skin in the game when it comes to a construction loan. You will need to have a minimum of 20% down which is a considerable sum if you are considering a 200 or 300K project. Sometimes the bank will take your lot value into consideration providing it has been paid off and you own it free and clear. They may even take into consideration your equity in the lot if it hasn't been paid off.
• We can help you with your budget, schedule, sub-contractors as well as design decisions. Your project must have an appraisal and it must appraise out higher than the loan amount of course.
• Once you have finished your project, your long term financing will take over and you will close your construction loan and start paying your mortgage which will be at a much lower interest rate.
• The process seems daunting at first but we have guided many people through it over the years and it can be very rewarding building your dream.

"Blessed are those who can give without remembering and take without forgetting." ~(Anonymous but sounds like Jesus Christ)