If you are thinking of building your own house then you should know about Construction Loans and its different types. A construction loan is also known as a self-build loan. It is a short-term and high-interest loan that you can take to finance building or rehabilitating your house or any real estate projects. Construction loans are based on the projected value of the house once the building work is completed. There are mainly three types of construction loans for you to choose from, they are:
1. Construction-only loans:
This type of loan is to be paid in full amount once your house building work is complete. If you carry a large amount of cash then you can choose this type of construction loan. You can contact Mortgage Broker Sunshine Coast to get any kind of assistance.
2. Construction-to-permanent loans:
In construction-to-permanent loans, the bank will pay you as soon as the building work is completed. And after that, the total cost amount is converted to a mortgage at closing. In this type of loan, you can make steady payments because you can lock interest rates at closing.
3. Renovation construction loans:
This type of loan will be useful if you are buying a fixer-upper. The projected cost of building or renovation you are planning to do with the property will be added in the mortgage including the purchase price.
These were the three types of construction loans from which you can choose according to your needs and requirements. You should also know that there are several benefits of claiming or taking construction loans including flexible terms and it is ‘interest-only payment’ until the construction work is completed. You can always get in touch with the best Mortgage Brokers Perth for any further help.
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