The Essentials of Home Construction Loans

custom homeHaving your dream home built is an exciting experience but your enthusiasm can be tempered easily with the unfamiliarity and intricacy of mortgage loans for a new home construction. Understand the fundamentals of home construction loans and be prepared when the time comes that you have to decide if you want to build your custom home.

2 Types Of Custom Home Construction Loans

Home construction loans are available in two types:

Construction-To-Permanent – You borrow cash to cover the construction costs. Once you move in, the lender will change the loan balance into a permanent mortgage, making it two loans in one.

Stand-Alone-Construction – the first loan you will get is going to be for the construction costs. Once you move in, you will obtain a mortgage to pay for your construction debt. Unlike the first type, this is two different loans.

Construction-To-Permanent Loans

You will have lesser fees to pay because you just have a single closing with a construction-to-permanent loan. In the construction period, you will only focus on the outstanding balance. The interest rate is changing during the construction phase, which means it could move up or down based on the prime rate. In case the Federal Reserve decreases or increases short term interest rates while your house is being constructed, you can expect your interest rate to change.

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All About Turnkey Construction

home builderIf you know anything about us at Dawol Homes, then you have a good idea that we always do our best to make sure that the home building process is easy for our clients. Building a home could be quite complicated, with lots of red tape and hassle. Your experience should be simple and streamlined, To that end, you should consider a turnkey construction by a reliable home builder.

What is turnkey construction?

Turnkey refers to a product that’s is sold as finished. And that means the burden to complete the project, which includes the legal responsibility for the home’s design and construction, lies on the contractor and not the homebuyer.

How does turnkey construction work?

First, the home builder will meet with you and go over the specifications that you would like to have for your new home. They will then come to an agreement and the construction as well as the finishes will be completed before the house is turned over to you. When it comes to the mortgage, you need to be prequalified for a traditional mortgage just like you were buying an existing home.

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Can You Build A Small Custom Home?

custom homeBuilding a custom home is not exclusive to wealthy buyers who are looking to have an expansive house. As a matter of fact, today’s trends show that buyers these days mostly want a smaller home footprint.

According to a National Association of Home Builders survey last 2018, about 42% of buyers will sacrifice square footage to have a home that’s affordable. In 2018, the size of an average new home for a single family is below 2,500 square feet, which continues a five year trend where homes are becoming smaller. Unlike others who think bigger is better, a lot of today’s home buyers prefer a home that’s affordable, comfortable, and energy efficient.

Are you considering a small custom home? Here are a few things you need to consider.

How much can you afford?

Get in touch with lenders to get an idea of just how much mortgage you are going to qualify for before you begin anything else. Know how much a banker will most likely loan you, and how much your monthly payments will be. This will help you keep you within your budget once the design process starts.

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Why Winter Is The Perfect Time To Build Your Custom Home?

custom homeWinter is the best time to start building your custom home. Listed below are a few reasons why you should think about starting your project now.

You can make sure that the design process is just right without needing to rush through it.

A nice weather isn’t essential to designing your dream custom home. However, you can expect that it will take time. If the duration of the nice weather is coming to a close in the summer or spring, you may be tempted to hastily decide about the design, to make sure things move along. But during winter, you can take your time and be sure that you make the right choices.

Choose a lot that looks great in summer and winter.

Custom home builders in many cases, see situations wherein the homeowners select a lot that is based on summer conditions. Then, the homeowners feel disappointed come winter. During season, you will get a chance to evaluate possible lots at their worst conditions. How does water run through or is it pooling? Are you going to get some sunlight with the low winter sun?

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Planning A House With A Mother In Law Suite

Dawol Homes Custom HomesHow do you find the best plan? How can you find the perfect plan for you? Provided below are some tips to help you get started in finding the perfect plan for a custom home with a mother in law suite.

Will A Tract Home Builder Add A Mother In Law Suite?

You might be wondering what a tract home builder is. These professionals build neighborhoods that are filled with houses in your area. A few of them are national firms while others are more local to simply a state or maybe two. They are also known as mainstream builders or cookie cutter builders.

The issue with basic plans made by tract home builders is that many of them do not include in law suites. The majority of them commonly have two master suites and they think that they are enough. So what will you do if the tiny bedroom on the main level just won’t cut it?

You can ask the tract home builder if you can add a mother in law suite. Do not be scared to ask and you will be surprised how some builders who are set on just building specific plans, do not really mind if you want to make additions to the plan. They just need the base house plan to be one of their own.

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10 Red Flags When Hiring A Custom Home Builder

custom home builderWhen you are looking for a custom home builder to help you build your dream house, there are some important characteristics that you need to be looking for. However, apart from searching for the best traits, there are 10 red flags that you also need to watch out for.

  1. The custom home builder asks for a sizable initial deposits or down payments before they start working on your custom home.
  2. The custom home builder does not provide any written contract. In case they do, what they present is a poorly written one.
  3. The builder offers a price that is seems too good to be true. In most cases, the state price is way lower compared to the other bids you have received.
  4. The builder cannot provide a clear work history.
  5. The Myrtle Beach custom home builder cannot or will not give a complete estimate.
  6. The builder depends mostly on allowances for their final bid.
  7. They use high pressure sales strategies.
  8. There exist several unresolved claims from the Contractor’s Board.
  9. The builder cannot provide proof that he or she has insurance.
  10. The custom home builder says your house, once built, will be used as part of their marketing strategies, and that is why you will be provided with a low rate.
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The Pros and Cons of Buying A Spec Home

Myrtle Beach custom homeWhile several people prefer buying a house that someone else has lived in, there are others who do not favor the idea and would like to buy something new. There are several advantages to purchasing a newly built home after all. It needs to be efficient, in good condition, clean, although this does not always happen. Whenever we talk about new build homes, you have two options. The first one is the custom home that has been specifically designed for you, with all the details you want. The second option is referred to as the spec home, which has advantages and disadvantages.

What is a spec home?

Knowing what a Myrtle Beach spec home is important. It comes by different names depending on where you are located. Sometimes it is called a move in ready home, featured home, immediate delivery home, and inventory home. A spec home is a house that was designed and constructed by a builder without any buyer in mind. The builder took the chance that he will manage to sell the house once it is near completion or it is completed. It would seem that the builder is taking a chance here, hoping that a homebuyer will pick the house he has built. Therefore, the architecture is going to be based on a standard plan, perhaps using a design that is well known in the neighborhood that he is building it in. Generally, the fittings will be referred to as contractor or builder grade, although some builders can offer to have them upgraded for an extra price.

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5 Things To Prepare Before Building Your New Home

custom home builderThe process of building a custom home starts long before the foundation is poured. The construction process is exciting and most efficient when you first create a good plan and find a competent and honest custom home builder. If you wish to avoid expensive mistakes during the construction process, you need to start with five crucial steps. When you move from a dream house to your real house, make sure that you ask questions and then share the progress with those who have already gone through the process.

Plan The Budget For Your Custom Home

Start considering the budget the moment you’ve begun to think about building your custom home. Create a realistic idea of the amount you can afford to spend and the amount you need to build a new custom home. The budgeting period is about creating a balance between what you want and a realistic evaluation of exactly what you could afford.

You will most likely need a mortgage and a . It is not too early to determine how big a loan you could qualify for, according to your income as well as other financial responsibilities. These days, most banks as well as other financial institutions are very eager to prequalify applicants for a construction loan, which will provide you with a good idea of the maximum amount of money that you can spend.

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6 Factors To Consider When Choosing A Custom Home Builder

custom home builderThe custom home builder you choose will have a significant impact on your project. A great and reliable builder could make a complicated construction work successful. If you need to make a decision between building companies, be sure to list the assets that each of them can bring to the project.

Choosing A Custom Home Builder

Education and Credentials

Business credentials show that a person is suitable for taking on the specific project. The National Association of Home Builders and the National Association of the Remodeling Industry as well as other industry associations like the National Kitchen and Bath Association provide award certifications as well as learning opportunities according to exams and experience. People who wish to advance their capabilities usually belong to at least one industry associations so look for memberships in national and local associations if you are considering the background of a home builder. Don’t forget to ask for accreditations or awards that show a passion for their job.

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Property Taxes Preparation Tips When Constructing A New Home

Myrtle Beach custom homeBuilding a custom home that has the amenities you need is quite different from purchasing a pre-owned home from a real estate building especially when we are talking about property taxes. Without the exact figure based on a historical amount, how will you know how much you need to roll into your mortgage or save? This has kept a lot of families wondering about the ongoing costs of home ownership especially when it comes to buying a newly built home. As confusing as it may seem at first, it actually just requires a little untangling. With a little research and legwork, you can have an answer that will relieve you of your stress that is related to your new home’s property taxes.

Property Taxes In Your Location

It does not matter where you construct your home, you will always be required to pay property taxes. If you are new to home ownership, you might not even realize that property taxes differ from one municipality to another. Generally, property taxes are evaluated by the local government, but also have federal and state consideration.

The first kind of tax that goes into calculating any property tax is the millage for your specific jurisdiction. The millage is a property tax that is due for every $1,000 in property assessment; it’s actually presented in the form of a percentage. For example, when your property is evaluated at $200,000, and the mill levy or millage rate is 1%, you need to multiply the $200,000 by 0.1 to obtain $2,000, which is the amount you have to pay for your millage tax.

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