Seeking new home build financing advice

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Dynasty90
Posts: 44
Joined: Thu Jan 23, 2014 12:34 pm

Seeking new home build financing advice

Post by Dynasty90 » Mon Feb 11, 2019 9:51 am

I will be building a new home this year. I found the land and found the builder. Now I am seeking advice on the financing.

Is a construction to permanent loan the best route?

I do not have the cash for the land and home. I will need to borrow the money to make the project happen.

I have the cash on hand to purchase the lot out right, but it would take away more than 50% of the cash I have. That concerns me as I would like to have cash reserves in case any unexpected construction costs arise.

Silk McCue
Posts: 3307
Joined: Thu Feb 25, 2016 7:11 pm

Re: Seeking new home build financing advice

Post by Silk McCue » Mon Feb 11, 2019 11:13 am

Yes. Construction to Perm is what you want to do. You don't want to undertake some other approach and run into a cash flow issue.

Cheers

Beach
Posts: 188
Joined: Tue Jan 10, 2017 5:48 pm

Re: Seeking new home build financing advice

Post by Beach » Tue Feb 12, 2019 2:13 pm

Overruns can happen very easily. Ensure you stick to your budget throughout the build or you could have to come out of pocket at the end to cover the difference. They do a separate appraisal at the end of the build and sometimes the value of the home can go down.

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