Home » Finance » Loans

How Do Construction Loans Work?

Jun 6, 2008
There are certain important milestones in almost every American's life. You get married, you have children, and you own your own home, although not always in that order. Owning your own home is definitely the most expensive of these options, and also the most broad. Sure, you could be like everyone else and buy an already built home in your neighborhood, but that isn't always the best option. If you can afford it, it is often best to build your own home. This way, you get the exact house that you always wanted.

The first thing you should know is the difference between home construction loans and mortgage loans. For one, they cannot be interchanged. Mortgage loans are for payments on a house you own. Construction loans are for the expenses involved in building a house from scratch, or adding a new section onto an existing house. This should be the first thing you learn when you're wondering how do construction loans work.

The next part of land and construction loans is the loan for the building of the house. After you've secured your loan for the land, all there is left to do is build the house. This is actually the most complicated and time consuming step. You need to make sure that you find land and construction loans that are good. You can do this by doing good research on the different lenders in your area.

There are exceptions to this rule, though. Construction-to-permanent loans are essentially both construction and mortgage loans. They start out as construction loans because they help pay for the building of the house. Once the house is done, it then turns into a mortgage loan. Then you only have to pay in installments rather than all at once. This is probably one of the most important things you should learning when you are finding out how do construction loans work.

After the construction is over and your home is completed, you will have to pay for the full balance of any new construction loans that you took out. Unfortunately, this is too much money for the average person to spend. Luckily, there are other options. Ask any prospective lenders if they offer construction-to-permanent loans. With this, your construction loan will turn into a mortgage loan at the end of building. This means that you won't have to pay all of the money when your house is done, and it will just go into regular mortgage payments, saving you hassle as well as money.

New construction loans are perfect for when you are planning on building your own home. Not only will you get the money that you need in order to have an amazing, personalized house, but you will also only have to pay interest during its construction.
About the Author
Do not forget to have an valuable tool on loan information .You will be able to get information on a various loan types so that you can find out what you need to know about Loan.
Rating:
Please Rate:
(Average: Not rated)
Views: 182
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources