New Build/Construction Loans

When it comes to buying a brand-new house there are many options. The following are the most common categories of construction financing:

• Purchase from builder at completion – This is based on entering an agreement with a builder to close on the purchase of a house when it is 100% complete. Depending on the timeline for consumer purchases an interest rate can be locked in anywhere from 4 – 12 months to account for the time to build. The first mortgage payment is after completion of property.
• Buying from a builder (Custom/Turn Key) – This is based on entering an agreement with a builder to construct a home with multiple draws of mortgage funds during the course of the build. As funds are drawn to build the house, the purchaser is responsible for interest only payments on the balance of the mortgage funds advanced thus far. Normal payments begin after completion of build and final mortgage funds are advanced.
• Self-Build – This is where you are the General Contractor for the build, hiring subcontractors to complete the work. It is an involved process that typically requires prior knowledge in the construction or project management fields and a great deal of oversight. 

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