Many of us probably rent a home and plan to own a house in future. There is residential construction financing to serve the needs of such people. The policy for attaining this financing aid has been constantly changing due to the new norms that have been put forth by the reforms of the bank financing policies. The process to get the financing aid includes the following procedure. The initial step is to locate the building site. Then go about the purchasing of the house plan or have a custom designed plan. Once the house plan has been designed, should find a builder and obtain a price for construction.
After the procedures mentioned above, inquire the bank about the construction loan that could possibly cover into permanent mortgage in completion of the residence construction. Then check with the mortgage companies where many of them provide hybrid loan packages financing the construction of custom homes. Weigh the different lenders and then choose a lender. Apply for the loan to the chosen lender.
Provide the information that the lender asks for such as the construction budget, survey of the building site, blueprints and the financial statement of the applier. The last phase includes the construction advance schedule that has to be requested which would match the obligation of the builder such that there will not be any cash flow difficulties during the residence construction.
There are various parameters to be considered before getting the financial aid. The residence construction loans have variable rates and the interest rates floating with the response from the market conditions. In some cases, we may not be able to finance the purchase of the building site; in such cases, the bank may finance the entire property including the land and also the construction. There is also a comment that it is easier to get a loan for purchasing an existing home rather than getting for construction since we have to own the site before availing the finance. There is no co-signer in case of this type of financing. However, the co-signer should also live with the house with you called the co-applicant.
The bank would finance 90 to 95 percent of the appraised amount. In case of self-employed person, applying for this facility should have a 2-year history of employment income and also should be in the same field. Many providers have attractive residential construction finance policies that would suit the many willing to own a house.