Construction of a new home can be a really great experience for
anyone. However, with the construction comes the question of finance.
New research shows that most loan originators have little experience in
terms of home construction loans. In fact, around 10% of loan
originators issue more than one construction loan per year.
When seeking out a loan to finance the construction of your new home you
should ask the loan originator the following questions: exactly how many
construction loans do they approve per month, what are the sources of
their funding, and do they have any respectable references. Also think
about doing a little research on your own using the internet. While
researching online, be aware that many online applications for home
loans are actually lead generators and are not actual applications for
home loans. Many online mortgage applications will collect your personal
information and sell it to a third party.
One reason that most loan originators are inexperienced when it comes to
issuing new construction home loans is because of the inherent
difficulty of giving such loans. When a loan officer is evaluating a new
home construction application, they must consider a wide variety of
factors including: the ownership status of the land where the home will
be built, whether or not a general contractor is involved, soft and hard
construction costs, and how much work has actually been started.
Unfortunately those are only a few of the things that must be taken into
account, there are many, many others. Knowing this, it is perhaps not
all that surprising that loan officers only give out an average of one
new construction home loan per year. The average home loan actually has
an estimated thirty-five people involved in the origination of that
loan. With a new construction loan the number of people involved with
the origination of the loan may be significantly higher.
Securing proper financing for your new home can be difficult to say the
least. If you are convinced that a brand new home is the only way to go,
you want to consider purchasing a home located within a subdivision.
Home builders who build homes within subdivisions are known for being
easy to work with. Because the home builder and the lender are either
one in the same or closely linked, securing financing for a new home
within a subdivision is typically much easier than obtaining a loan
independently.
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