Building a Home – Financing
I began my home building process full of excitement and anticipation of finally putting life to a dream. Soon realizing I was out of my element; not knowing what to do or where to go. Reaching out to family and friends that have built a home, I gained insight on the steps they took. With tips and ideas in hand, I was ready to set out on this journey of building a home.
My first step was to prepare for the pre-approval process. This included checking with the credit bureau, making sure my credit score was accurate and that nothing was on there that should not be. I also had to gather information on all of my assets. These included one-year bank statements, two years of income taxes and any other assets that pertained to my financials. I had been reminded to be realistic through this process and not to go around applying at every bank I see. Once I had that information gathered, I moved onto the next step of selecting a home-builder to design a house that met my needs within my budget.
After that was completed, I made my way back to the bank with plans in hand. It was time for the bank to order an appraisal. They do this to make sure the plans not only met my budget, but would also meet the contract amount to equal appraised value for resale purposes. Now that the appraisal was finished, I could move on to obtaining a construction loan. The loan provided the funds to the title company, who was responsible for the disbursement of funds throughout the build to pay for the expenses. I only had to pay interest based on the balance that was carried at the time.
Once my house was built, the final draw closed the construction loan. From there I was able to move into a conventional mortgage. These can be anywhere between 15-30 year terms. Working with the home-builder to make sure I stayed within my budget and built a home I could afford was important for me as a new homeowner. Enjoying my beautiful sun room, I think back on the process and all who had put time into creating my dream home and I could not be happier with the experience.