Financing Available :)
Our clients' projects come in all different shapes and sizes, so we offer a number of different ways to finance them. Each choice has different qualifiying parameters and characteristics, so some may be appropriate for your situation, while others are not. We have 25 years experience working through financing alternatives with our clients, so don't be shy in asking if you have a question.
Here's a short discussion on how most of our clients finance their projects. If you don't see one that you think would work for you, you have questions about financing or would like recommendations of great lenders that specialized in construction lending, give us a call.
1) Cash Savings. This choice often is used with smaller projects, although we've had clients build new homes for over $2.0 million with all cash. It's simple and easy to do if you have already saved and earmarked an appropriate amount for your proect.
2) Revolving Credit. For projects up to $50,000 we offer a revolving line of credit from a third party national lender. This is a quick and easy way to finance small projects. We usually can have a credit approval within an hour. Available terms included interest free if paid in full within 12 months as well as low affordable rates for terms as long as 72 months.
3) Stock Portfolio Loans. If you have a stock portfolio, but prefer not to liquidate your positions, some of our lenders specialize in making loans based on the value of your portfolio. Generally, quick and easy loans to do.
4) Family and Friend Loans. It's not unusual for all or part of a construction project to be financed by either a family member of friend.
5) Line of Credit. Many of our clients finance additions and remodeling projects with already opened and available lines of credit, secured by the existing equilty in their home. These are very simple to use, as you simply write a check to draw down on the line.
6) Construction Loans for Additions and Renovations. This type of loan is based on the anticiapated value of your home after the addition or renovation is complete. The loan is used to re-finance your existing mortgage, then pay the addition or renovation construction costs through periodic draws at the time they are needed.
7) Construction Loans for Lot Purchase and New Home Construction. Construction loans are specialty type consumer mortgage loans that provide initial purchase money for the lot, plus additional draws paid at periodic completion points of the project to cover the cost of construction. Some of the loan offering are simply for the construction period only, and must be refinanced upon completion of the home. Most of the programs our clients utilize convert from construction loans to permanent single family mortgage loans with 15 or 30 year amortizations and 3, 5, 7 or 10 year terms. The rates can be very competititve in either fixed or adjustable terms. The loan to value percentages (LTV) vary between lenders and programs, but in most cases are 80% or more (this means you need 20% down). If you are considering a large home, one of our lenders has an 85% LTV program with a maximum loan value of $1,750,000. If you qualify, they would fiance a $2,060,000 home with $310,000 down!
8) Builder Financing. For well qualified clients, we will finance their new home construction project and simply transfer ownership of their home to them upon the completion of the project.
There are pros and cons with each of these financing approaches, including in some cases impacts on your taxes. When you're ready, let's get together face to face to determine which financing method would be best for you. We'll be happy to share our best construction and mortgage loan knowledge and contacts, and if you are planning a new home, we'll give you a copy of our 90 page book, "What to Expect When Building a New Home", subtitled "Questions Smart Homebuyers Ask Their Builder".
For more information on the process of building a new home, Click Here.