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Seeking new home build financing advice

Posted: Mon Feb 11, 2019 9:51 am
by Dynasty90
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.

Re: Seeking new home build financing advice

Posted: Mon Feb 11, 2019 11:13 am
by Silk McCue
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

Re: Seeking new home build financing advice

Posted: Tue Feb 12, 2019 2:13 pm
by Beach
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.