New Construction Loans: From Blueprint to Reality
For many, the idea of constructing a home from the ground up represents the ultimate dream. Unlike the purchase of an existing home, constructing a new one provides the chance for personal customization at every step, enabling you to bring your distinctive vision to life. New Construction Loans are the financial instruments that make this dream possible. These loans are tailored to offer financing throughout the various stages of the home construction process.
Primarily, they are crafted to fund construction in stages, aligning with the progress of the building process. Instead of receiving the entire loan amount upfront, borrowers receive disbursements or “draws” as they achieve specific construction milestones.
This arrangement benefits both the lender and the borrower. The lender’s risk is reduced, and the borrower only incurs interest on drawn amounts. Upon the completion of the home, these loans frequently transition into standard mortgages, ensuring a smooth shift from construction to homeownership.
They are usually short-term, often around 12 months, but the term can vary based on the construction timeline.
New Construction Loans often require a larger down payment, sometimes 20-25%, due to the higher risk associated with home construction.
Yes, many construction loans are designed to transition into a conventional mortgage once the home construction is finished.
Absolutely. Lenders will review the reputation and reliability of the builder to ensure the project’s successful completion.
Starting your journey of constructing your own home is exciting, but it’s crucial to have the right financial partner by your side to provide the necessary support. With New Construction Loans, you gain the flexibility and structure needed to see your dream home come to life. Ready to lay the foundation for your future? Connect with your Nationwide Mortgage Bankers (NMB) Loan Officer today to start building your tomorrow.
*All product information represented on this page is subject product guidelines and can change at anytime. It is for educational and informational purposes only and not a commitment to lend. Please contact your Nationwide Mortgage Bankers Loan Officer today get the latest product guidelines and guidance on what loan programs fit your unique financial picture and goals.
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