Question:

How to obtain residential construction project financing?

Answer:

When obtaining residential construction project financing you must be assured you can even get 100% financing. Most lenders will fund between 75 to 100% of the loan amount.

Types of Residential Construction Project Financing

  • Owner Builder - You are the owner and the primary contractor responsible for completing the residential construction on time and within budget. Most people who go for a custom built house act as owner builders and receive owner builder construction loans.
  • Custom Contractor is another form of residential construction project financing. A licensed builder is hired to observe and reach final stage of construction.
  • Remodel/Addition loan is type of residential construction financing to increase space or remodel your house.
  • A Take-Out loan is construction loan that transforms into permanent mortgage once construction phase is completed.

Before obtaining residential construction project financing, you will have to take into account the cost of land and materials in the area you are having your house built, as well as labor (subcontractors to do the plumbing, wiring and masonry).

Also, when getting residential construction financing, make sure you go through prequalification stage. This will clarify how much you will need to borrow for your custom built house project and help you figure the budget.

Final piece of advice: Monitor your credit report and score regularly, to ensure there are no inaccuracies or unauthorized activity. Your credit report and score are the two major methods that creditors and lenders use to make a credit decision about you. Higher scores usually mean lower interest rates, which will save you money.

See All 3 National Credit Scores & 3 Reports Instantly, Online & Free!

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Common misspellings: mortage and morgage