2007-05-26 02:55:33 · 4 answers · asked by momof3 1 in Business & Finance ➔ Renting & Real Estate
It comes down to value and income. If the property has the value to cover the mortgage(s) and you have the income to pay for it, the bank would be more than willing to lend you the money.
2007-05-26 03:04:31 · answer #1 · answered by marie 7 · 0⤊ 0⤋
You can get a construction loan based on what the property will be worth when the home is finished. You will need to submit plans and cost estimates, and probably have several inspections.
The mortgage company will pay money out based on meeting certain milestones, like having the plumbing and electricity roughed in. During the construction period, you will probably have to make payments, but they will likely be interest only payments, based on the amount of money you have borrowed so far.
Some mortgage companies offer a loan that will convert into your permanent loan once you finish construction, which could save you money by only having to close once. You will need to check the rates to be sure it's a good deal.
Be sure to budget for overruns - once you set up a maximum amount for a construction loan, it's very difficult to increase it without incurring additional costs. If you don't spend all of the money you have asked for, then that's okay, but if you want to spend more, it's an issue.
2007-05-26 03:04:24 · answer #2 · answered by aj485 5 · 0⤊ 0⤋
Yes, they will. When applying for the mortage loan, just take in a realistic list of expenses it'll take to complete the house. The lender will appraise the market value of the location and the projected finished product, and will lend on it accordingly.
2007-05-26 02:59:17 · answer #3 · answered by Stuart 7 · 0⤊ 0⤋
They will, but not a regular loan.
You need a construction one, in which they give you money as you spend it and you only pay interest on what you spent until it is finished. After it is finished they give you a regular loan.
2007-05-26 06:02:44 · answer #4 · answered by Anonymous · 1⤊ 0⤋