Overview Of Florida Home Construction Financing Solutions

If you are thinking of building a new home rather than buying an existing home, it is important to find out about the financing solutions available. Financing new homes is somewhat different than financing an existing property. The terms, interest rates, and processing will vary. Here are some popular Florida home construction financing solutions.

Construction Loans

Construction loans are temporary options that make funds available throughout the construction process. There is usually a schedule for when money is disbursed and in specific amounts. Particular milestones must be reached at each phase. The expenses, interest calculations, and other terms will be unique to each mortgage company. Construction loans are considered risky, therefore conditions are normally more intricate than regular mortgage programs. A new loan takes effect before possession.

Construction to Permanent Loans

Construction to permanent loans require a single closing. During the construction phase, interest-only charges are normally due. Once construction is over, it transforms into a normal mortgage with regular mortgage payments. Interest rates are typically determined when construction starts, but the lock for the permanent segment of the loan can have a deadline. If the house is delayed, then the interest rate may change for the permanent loan.

Builder Financed for Home Construction

This is the better option for a buyer because no special loan is needed by the buyer. Buyers are typically required to give a higher deposit and to pay for upgrades ahead of time. Buyers must have a loan before taking possession.

Florida Home Construction Financing Solutions

Financing solutions available will depend on who owns the land. Lots that you own ordinarily need a construction loan or construction to permanent loan. Builder financing is generally offered within new developments. Programs may also range by lender as many offer unique options. Connect with a lender to find out about all of the different Florida home construction financing solutions and associated expenses before making a decision.