New Construction Loans
Many people dream of building a custom home. But before deciding on a brand-new home, it’s wise to learn about construction mortgages and the special terms and conditions that apply. We have accredited mortgage professionals with experience in financing new construction projects in all shapes and sizes. Here’s some information if you’re looking to break ground on a newly constructed home.
What Is a New Construction Loan?
New home buyers can acquire a mortgage to build a home. In most cases, this will mean hiring a qualified builder to build the home at a fixed price, but variations of this type of financing can be used by buyers and builders. There are two main types of construction loan:
- Progress Draw Construction Loan: With this option, money is disbursed as construction progresses. There are normally three draws during construction; a progress report from an appraiser verifies the completion of each stage.
- Completion Mortgages: This type of loan applies to newly constructed homes purchased from a builder. The borrower presents the money to the builder when the home is 100 percent complete based on a contract drawn up in advance. A down payment is still required.
Buying a new home also requires more due diligence on the part of the buyer to ensure the home they are agreeing to buy will meet their specifications and be free of serious defects.
Is a New Construction Loan Right for You?
If you can’t find the house of your dreams, building it may be an option. Come visit the Vancouver Mortgage Team to learn more about construction loans. We’ll help you figure out what you can afford, and take you through the process of financing your new home all the way up to the exciting day you get to move in.
Come visit us to learn more about new construction financing and to find a mortgage product that’s right for you.