Financing For New Construction
Kachi Realty
Financing For New Construction
Financing For New Construction
When most people get a loan for a home, they are buying a house that is already built. That means they will take out a loan that covers the existing structures and the land all at once. However, when you decide to have a home custom-built for you, you will usually take out a slightly different type of loan. There are a few ways to handle the financing of a house that is to be built for you.
Builder Financed Loans
Many people choose to finance the new home construction through the builder. This can take a lot of the guesswork out of the financing. The builder handles the financing for the construction period until the home is complete and ready to move into. At this point the homeowner takes out a permanent, traditional mortgage on the home.
The benefit of this is that you let the builder carry the financing and then basically buy the home from them when it is done. It saves you from having to do a dual mortgage, which is another option to consider. It also lets the builder carry some of the risk during construction.
Taking Out Two Loans
If you finance both the construction and the home itself through your own lender, you will find yourself with two different loans. The first is the construction loan, which is the cost of the building. The second is the permanent mortgage that makes you the homeowner.
This is an effective way but can be more time-consuming, and means you have to apply twice for the two different loans. The construction loan has a short time period and the permanent loan is the traditional mortgage. You will have to pay closing costs on each loan and have different terms. You may find that not every lender will offer both types of mortgage.
Combination Mortgages
A combination mortgage is a loan that is designed for people building new homes. It involves only one application process and one set of closing costs, and basically converts from a construction loan to a permanent mortgage when the construction is complete.
This simplifies the loan application process but does come with a downside. Because the options for the permanent mortgage are more limited in this scenario, buyers may find themselves paying too much on the loan in the long run.
Choosing the right mortgage depends on your circumstances and what loan terms are offered through each option. It’s important to compare them carefully and determine which one makes the most sense in the long term.
Useful Information from Kachi Realty LLC
Cut your energy costs with easy home tips. Learn how smart lighting, efficient appliances, and simple thermostat tricks can help you save energy and money year-round.
WAYS TO GO GREEN IN THE KITCHEN Start a garden. Whether you opt for a full-out vegetable garden or a small window of fresh herbs, the taste of freshness will be unmistakable! Shop locally! Visit local farmers markets or choose locally produced produce whenever possible. Bring your own bags when you visit the grocery store. Switch to energy-efficient light bulbs. Save time and energy by cooking a double portion and setting half aside in the freezer for a quick meal at a later date. Get energized and leave the appliances alone. Whenever possible, mix and beat ingredients by hand, cook multiple items at the same time, and avoid washing dishes unnecessarily. Use energy-efficient appliances such as the slow cooker or toaster oven, which can use up to 30% less energy. Be aware of energy wasters such as excessive pre-heating or simmering. Ditch the wraps (such as saran wrap or foil) and make the switch to reusable containers for lunches and leftovers. Put a lid on it! Did you know that cooking with lids could save up to three times the energy? Keep all that steam inside the pot for a more energy-efficient (and faster!) meal. Go fresh—say goodbye to excessively packaged foods, which are often produced using processes that are harmful to the environment. Cooking meals from scratch using fresh ingredients is not only healthier, it’s often less expensive and better for the environment. Decide what you are looking for before you open the fridge, and never keep the door open longer than absolutely necessary.
Water Features For Your Yard A water feature can make a major change in your yard, and there are plenty of different ways to go about adding one. From a simple and small fountain to a koi pond or waterfall, you can use water to create a peaceful sense of a real escape from life in your yard. Small Water Features For small yards or for those looking to add something simple, a basic fountain is easy to add. They come in a variety of types, shapes, and sizes and can fit into any landscaping. Your fountain can be a centerpiece for the yard or can be placed near the patio. You can even get a small tabletop fountain for the patio table. Most fountains are easy enough to install by yourself. They use a pump system that circulates the water and keeps the fountain running. Follow all of the instructions for set-up, use, and care that come with the fountain and you can enjoy the sound of trickling water for many years to come. Adding A Pond A pond is a really eye-catching and special addition to any yard. You will need some space for it, but even smaller yards can manage one. Koi ponds are a very popular choice, as the fish are lovely and create an ambience in the yard. They fit in well with any sort of Japanese or other Asian landscape design, but really extend into other styles as well. Make sure your pond has a system for keeping the water circulating and clean; standing water can become a breeding ground for mosquitoes, and it can get quite dirty over time. It’s best to have a professional install the water system for your pond. Waterfalls You may not be able to have Niagara Falls in your yard to enjoy, but you can get a waterfall added as a feature of your yard. These can be falls that descend over a rock wall, a small stream that runs over consecutive drops in a sloped yard, or something in a corner where water falls down into a small pond. A waterfall adds the sound of moving water to the air all the time. Be sure you have proper drainage for the water system. Water features are a beautiful addition to any yard, and your imagination is really the only limit. Many professionals can help you to design the water feature that is right for your yard and your needs.