2 Types of Construction Loans | Tampa Construction
Construction to Permanent: Construction-to-permanent loans provide the funds to build the dwelling and for your permanent mortgage as well. Essentially, you borrow money to pay for the cost of building your home, and once the house is complete, the loan is then converted to a permanent mortgage. Construction Only: A construction-only loan provides the funds necessary to complete the building of the property. The borrower is responsible for either paying the loan in full at maturity (typically one year or less) or obtaining a mortgage to secure permanent financing. Factors to Consider Before you choose your construction loan, important factors to consider: Timeline of the build and factors that can affect it (weather, etc.) Decide if you want to go through the loan process twice and consider the closing costs fees this may add To qualify for a residential construction project, you’ll need excellent credit, stable income, a good debt-to-income ratio, and funds to suppor...