Construction loans are a bit different than other types of loans. A construction loan can be applied for either a residential project or a commercial project; however, you have to be clear about the project type before you can get the loan that you desire. Unlike a loan that you might get at a traditional bank for remodeling a room in your home, a construction loan is provided by a speciality company that understand all of the ins and outs of california construction loans. Additionally, the way you pay back a construction loan can be far different than a more traditional loan, so you have to be aware of that as well.
One of the first things that you will want to look for from california construction loans is the ability to utilize a one time close option. The one time close option allows you to roll your construction loan and your mortgage loan into one loan so that you only pay fees, such as closing costs and other associated fees, a single time. By using this option you could literally save thousands of dollars on your loan.
Another thing that you will want to consider is a construction to perm or permanent loan. This type of loan allows you to carry on your construction loan after the construction is completed. Many california construction loans will offer you this option and it is ideal for those individuals who are getting a residential construction loan versus a commercial loan. You see a construction loan is a short-term loan and has to be paid back in four months to two years depending on the type of loan. However, a construction to perm or permanent loan allows you to change that into more of a mortgage type loan, which allows you to make payments over time like you would normally expect to do.
You will also want to look for a cash out finance option from california construction loans. The cash out finance option allows you to take out a construction loan that covers your current mortgage and then some. Basically it is a new mortgage for your home. You will receive a loan amount that is higher than your mortgage amount, pay off your old mortgage and use the remaining money to remodel your home. You then pay your monthly payment just like you used to with your original mortgage.
Author Resource:
My name is Rick Gomez, branch manager of both California construction loans and nationwide construction loans. Download 15 Inside Construction Loan Secrets.
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