Like most other homeowners, you need financing to achieve your dream of having a beautiful, custom built home.
Even though you need a mortgage for new custom homes the same as you would for any existing home, the lending process involves a few more steps.
To make it easier, always work with qualified new custom-home builders that your lending institution is willing to trust with your home building project so you get the financing you need.
Mortgages and New Home Construction Loans - Not the Same Thing
When you decide to custom build a house, the first thing to know is that you must begin by getting a new home construction loan, not a mortgage.
Mortgages are loans on an already existing building. New custom home financing is a loan to actually build the structure.
These short-term loans cover the project while your builders are working on it through its completion.
What Is the Process for Getting A New Construction Loan?
From the moment you contract with new custom home builders until you have a beautiful, brand new custom built home to live in, you will go through a number of financing steps to make it all happen:
Because new construction loans are short-term loans designed only to finance a building project, you will still need to apply for a traditional mortgage once the house is complete.
You must apply for a traditional mortgage that pays off the balance on the construction loan, which you must pay off like any other mortgage you may have taken on an existing property.
A Final Thought About The New Home Lending Process
If you are considering new construction to build your dream custom home, start researching your financing options early.
Find the best lender who is willing to work with you and your custom home builder and look into how to minimize any potential issues that could affect your project.
Once you have your lending process outlined and underway, you’ll be glad you chose to build the new custom home of your dreams!
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