A traditional mortgage is not the same financing your custom built home. A mortgage is a loan that allows you to purchase a structure and land. Mortgage financing is easy for anyone who has ever purchased a house. Things are different with a custom built home.
Construction loans are a type of loan you need for your custom built home. However, most people don’t know much about them. We hope this article will help you get a better understanding of custom home financing.
The three main transactions in new home construction include the purchase of land, construction, and a mortgage. You will need to get financing if you want to build a home. However, different institutions may offer different types of loans.
Different Types Of Loans To Fund Your Custom Built Home
To purchase your home site, you can get a loan for a significant amount. The location, size and value of land, as well as other factors, will affect the interest rates and the prices. A construction loan is used to finance the building project. It is designed to allow periodic disbursements to cover the various phases of construction, as they are being built. The mortgage is then taken out for the final home.