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CONSTRUCTION LOAN – Build your new home with a construction loan and possibly you can spend less than buying an existing property. Construction Loan can be used for –
- Renovations in your existing home
- Renovations needed in a property to bring improvements and make it a home you want to live in
- Constructing a new home from the scratch
Different ways of financing a Construction Loan
There can be different approaches for a Construction Loan –
– A construction loan for the period of construction, that can be made permanent at the end of the construction period.
– A temporary construction loan for the period of construction, to be paid off post the construction by a permanent loan from another lender.
All lenders have different requirements for the construction loans and sometimes with loan for property and
construction loan. As a result construction loans are often set-up with many errors. The loan disbursement may get affected if there are too many changes and revisions are going through. We will review and discuss your circumstances and the terms offered by the provider, before initiating the process. At Planet Finance, we offer the right strategy based on your financial situation and your future plans, to get you things right the first time.
Our friendly team will assist in negotiating the right deal for construction loan, and help throughout the process.
Two Loans Versus One Loan: Two loans mean that you shop twice and incur two sets of closing costs. One loan means that you shop only once and incur only one set of closing costs. But, to do it effectively, you must shop construction loans and permanent loans at the same time.
Construction loans usually run for six months to a year and carry an adjustable interest rate that resets monthly or quarterly. There are closing costs, and construction fee charged by the banks, and as the loan can be paid out in stages, it is important to monitor the progress of construction.