There’s generally 2 steps involved. This first is the purchase of the land. It is advantageous to find a good location for desirability and potential resale value in the future. The second step is the cost of the land purchase and financing. You will have to consider the financing and closing cost from your land lender. If the land has been purchased from the very the beginning it will be taken into consideration in counting it as part of the required down payment.
You will have to consider the size of the lot and the size of the home you want to build. You will have to learn the permit cost and how to obtained them from the county. It is wise to find out if there are any deed restrictions that may be imposed on the property.
Be sure to consult with an architect and give them a general ideal of what are the things you will want to have in the build out. Let the architect produce a set of house plans and detailed construction costs. In this part of the process contact your lender to get an idea of the loan terms that can be offered to you and closing cost.
Your lender will want to pay off the existing land loan if it was financed. This will allow the lender to be in first position and proceed with the construction loan.
This describes a construction loan with 2 sets of closing cost. The first is the closing cost paid for the land loan. There is also the closing cost for the construction loan.
Value Funding Inc. takes another approach. We will finance the land purchase and the construction loan as a 1 Time Close. We eliminate the need to have 2 closing cost. We can save you from having double expenses.
The cost of the construction is based on an interim loan charged as an interest only basis. There is no principle payment added to this loan at this stage. This can be a Conventional with as little as 5% down payment or as a VA Loan with a 0 % downpayment.
We will require a 700 credit score or higher and an added 10% of construction costs as an over run contingency on Texas properties. Borrower Will have to show that they have the added 10% in the bank in the event that actual costs are higher than projected cost shown in the budget.
The interim loan is later converted from a construction loan to a permanent 30 year fixed rate. The rate quoted will be the interest rate at the time the transaction takes place. Making it a 1 time close ground up construction loan
Give Value Funding Inc. a Call 210-649-8807 to consult on your construction project. Or email us at [email protected]. We’d love to give you our loan proposal.