What is the process to buying a home in a new construction community?

Question

I want to build a new construction home. The loans I have researched want interest-only payments until the house is complete. That is impossible considering that would be as much as a house payment and I already have a hefty one of those! I will make a nice profit off my house once it's sold but I can't do that until my new home is built. And I can't build my new house until.......you see my problem?! They also require $5K down. Can that be included in the one loan I get so I don't have to take out two loans? I have to be overlooking something. I can't imagine it's this difficult for everyone who already owns a home and wants to build. Any tips or knowledge would be greatly appreciated!!

Answer 1

Yes, you can get a Construction loan to add in the cost of the loan (interest accrued during construction). Once construction is complete you convert that loan to an 'end' loan. No worries.
Who is requiring the 5K? The builder? or the lender?
Do you own the land the home is being built on or looking to finance that as well? That will make a small difference in how they calculate the values for loan to value etc.

Most cases will require a strong credit profile and some assets (for reserves) Best guide have 4 months salary in savings or 6 months of mortgage payments in savings - the greater of the two will qualify you for the best rates and programs for construction lending.

Not all banks do constructions loans, call around or look online. You can e-mail me as well.

Hope this helps,

Answer 2

When you get the construction loan, you will make your interest payments out of the construction loan. Your interest will only be for the amount you have used. Most banks will give you 4-7 draws, in which they deposit money into your account, so will only pay interest on what you have borrowed. So your first interest payment should be a few hundred dollars and increase each month as you pull more money from the bank. I just finished building my second house the final constuction loan was about $180,000 and I paid a total of about 5k through 6 months. The 5k down is going to have to be out of your pocket, a lot of banks will require this if you already have another mortgage, a lot of times they will make you put it in a CD with the bank. This is from my experience but each bank is different.

Answer 3

Have you talked to the construction company? They might carry the construction loan if you have put down a reasonably down payment. But sounds like you'd have to come up with the $5000 for the down payment without borrowing it - that's pretty standard.

Answer 4

Yes they do have equal right and are very happy with Israel.I Very few Arab Israelis are against there country.You cant judge and point fingers, because you have never been there and dont know.Israel is one of the most open societies in the world. Out of a population of 6.7 million, about 1.3 million — 20 percent of the population — are non-Jews (approximately 1.1 million Muslims, 130,000 Christians and 100,000 Druze). Arabs in Israel have equal voting rights; in fact, it is one of the few places in the Middle East where Arab women may vote. Arabs currently hold 8 seats in the 120-seat Knesset. Israeli Arabs have also held various government posts, including one who served as Israel's ambassador to Finland and the current deputy mayor of Tel Aviv. Oscar Abu Razaq was appointed Director General of the Ministry of Interior, the first Arab citizen to become chief executive of a key government ministry. Ariel Sharon's original cabinet included the first Arab minister, Salah Tarif, a Druze who served as a minister without portfolio. An Arab is also a Supreme Court justice. Arabic, like Hebrew, is an official language in Israel. More than 300,000 Arab children attend Israeli schools. At the time of Israel's founding, there was one Arab high school in the country. Today, there are hundreds of Arab schools.2 In 2002, the Israeli Supreme Court also ruled that the government cannot allocate land based on religion or ethnicity, and may not prevent Arab citizens from living wherever they choose.2a The sole legal distinction between Jewish and Arab citizens of Israel is that the latter are not required to serve in the Israeli army. This is to spare Arab citizens the need to take up arms against their brethren. Nevertheless, Bedouins have served in paratroop units and other Arabs have volunteered for military duty. Compulsory military service is applied to the Druze and Circassian communities at their own request. Some economic and social gaps between Israeli Jews and Arabs result from the latter not serving in the military. Veterans qualify for many benefits not available to non-veterans. Moreover, the army aids in the socialization process. On the other hand, Arabs do have an advantage in obtaining some jobs during the years Israelis are in the military. In addition, industries like construction and trucking have come to be dominated by Israeli Arabs. Although Israeli Arabs have occasionally been involved in terrorist activities, they have generally behaved as loyal citizens. During the 1967, 1973 and 1982 wars, none engaged in any acts of sabotage or disloyalty. Sometimes, in fact, Arabs volunteered to take over civilian functions for reservists. During the outbreak of violence in the territories that began in September 2000, Israeli Arabs for the first time engaged in widespread protests with some violence. The United States has been independent for almost 230 years and still has not integrated all of its diverse communities. Even today, 60 years after civil rights legislation was adopted, discrimination has not been eradicated. It should not be surprising that Israel has not solved all of its social problems in only 60 years.