Six Steps to Successful Construction Financing

Six Steps to Successful Construction Financing

Building a new home or even starting a home project can add up to be a steep bill. Not all home owners have the money it takes to start these projects but in the case of many New Jersey residents, these projects are necessary. For those who need to get started, consider construction financing to help you get started. Getting a loan is never easy so we’ve compiled some steps to help you through the process. Pick What Works Best for You When considering construction financing, know that you have many options to choose from. Most construction loan choices will include 30 year fixed, 15 year fixed, 1 year ARM, 3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM or interest-only loans. There is the option of choosing a short term loan of one year that can be refinanced into a new conventional mortgage loan once your construction project has been completed. While this option allows for flexibility when shopping for conventional mortgages, you will have two sets of process costs and closing costs. Get Pre-Qualified Getting pre-qualified for a loan will help you through a few steps of the construction process. First, it will help you understand your budget better. Second, you will know what your monthly mortgage payment is going to be. This step is necessary and understanding your construction project as a whole. You want to make sure you can afford the project before you start the project. Do Your Research Don’t stop at the first bank you find and get a loan. Shop around and go to different banks in your area. It is best if...