When it comes to achieving home ownership, there are two choices to make. One is to buy a pre-existing house with the help of a mortgage, and two is to apply for a construction loan to build your dream home. But which one is a better choice?
It is true that buying an existing home is convenient, cheaper and easier to qualify for. However, building your home offers a lot more benefits. But like a home purchase, constructing a house from scratch also has its drawbacks. To better understand why it is worth building your home than buying one, here are the perks of a One Time Close Construction Loans Texas.
One time close construction loans let you build your dream home according to your preference.
You get to customize your home as you wish. By building your home from scratch to finish, you have the power to choose the design, the number of rooms, location and even the finished look of your home — no need to renovate as you can already get what you want from the start.
You get to choose the builder, materials used, etc.
You’re the one to decide who your builder will be. It gives you the freedom to ask for referrals and find an excellent builder with the right experience, license, and great reviews. Also, you can build your home using brand new materials of your choice, meaning you can ensure the quality and durability of your home.
One can enjoy lower costs with one application process and a single closing.
Unlike other loans, a One Time Close Construction loan only requires you to undergo an application process once. Since there is only one closing, you just need to pay a single closing set. With one application and one closing, you get to enjoy lower costs.
It lets you lock the interest rate and prepare enough cash during the construction stage.
When approved with a One Time Close Construction loan, you only pay the interest during the construction stage. It is an excellent advantage for borrowers since you get to watch your house built, while you only pay for a fixed interest. All this gives you enough time to save up and pay for the principal amount once the construction of your home is complete.
You get to acquire secure financing of your home’s construction.
Another perk of One Time Close Construction loans is that once you have permanent financing before the building process starts, you get to work with a construction loan with lesser risks. Your lender can even allow you to obtain permanent funding even if you’re unfortunate enough to lose your job during the construction stage.
Building a brand new house allows you to create instant equity.
For instance, the total cost of the land and construction of your home is at $350,000. Upon completion, the value is at $380,000. You’re able to create instant home equity of $30,000 just by building your own home.
When it comes to construction loans, borrowers need to understand that not every lender will have the same reputation, experience, rates, terms, and requirements. Make sure to find the right mortgage lender to get the best deals when applying for a One Time Close Construction Loans Texas.