July 3, 2019
Most homeowners only consider traditional loans when looking for financing for their home, but in many cases there may be a better option. In some cases special financing, such as a construction loan may be the best option for the buyer, or builder.
Construction loans can be a great option for some who don’t qualify for a traditional loan for a few reasons. Let’s look at three uses for construction loans.
New Construction Loans: Short Term
If you plan to build a home and pay cash for it once it is complete, a short term construction loan could be a great option for you. If you, for example, are selling a home that is either paid off or has a lot of equity in it, but don’t want to wait for the sale to be complete before beginning construction, a short term construction loan can be a perfect solution for you. Likewise, if you are a builder looking to build and sell a home, a short term construction loan can secure the financing for the project until the sale is complete.
New Construction Loans: Long Term
There are also longer-term construction loans available. These loans are converted into regular mortgages when construction on the home is complete and closing on the house takes place. This type of construction loan is a good fit for homeowners who are building but will still need a mortgage once the project is complete.
Renovation loans are another type of construction loan available to buyers who are purchasing a home using a mortgage, but also need a considerable amount of money to renovate the home. These loans allow for additional money to be mortgaged above the sale price of the home, assuming the buyers will add equity to the home with the renovations.
Construction loans can be a great option for those who are building a new home from the ground up, or for those who are purchasing a house that is in need of a lot of work. Because these loans aren’t traditional loans, it is essential to work with a mortgage company that specializes in non-traditional loans.
Your Local Resource for Maryland Construction Loans
At Maryland Private Mortgage we specialize in construction loans in Maryland and would love to help you get started. We’d be happy to answer any questions you may have and help you with your upcoming home build or purchase. Contact our professionals today!
The Maryland Private Mortgage Lending Team