Home Construction Loans

You can maximize your savings by shopping for a lender that can provide you with a combination loan. The combination loan starts as a construction loan. During this phase, your lender cuts checks to your builder and their subcontractors as they successfully reach significant steps in the building process. Once your home nears completion, your lender activates a traditional mortgage.

The new loan pays off your construction loan and rolls the remainder into the assessed value of the new property. The first way a combination loan can save you money is by eliminating a second set of closing costs. By handling both deals simultaneously, you save yourself and your lenders considerable time and money, savings that lenders are happy to pass along in the form of preferred rates.

Many banks let the commercial side of their business handle construction loans, while the consumer division oversees the mortgages. Therefore, the best place for you to start your hunt for the best deal is with the branch manager of the banks with offices in your area. Unlike traditional mortgages that can be handled over the phone or the Internet, construction loans require significant local oversight.

Fortunately, commercial lenders enjoy the opportunity to plant more roots in their communities. In fact, the commercial banker handling your quote for the construction loan may be able to pull strings to get you a more competitive quote for your eventual mortgage.

When shopping for construction loans, understand that the commercial lender will charge a much larger administration fee to compensate for the step-by-step management of your building process. Sometimes, you can expect to pay three, four, or five points (percentage points of your home's value) as a fee to the bank. Considering the amount of work involved in communicating with builders and subcontractors, most administration fees actually pay for themselves by freeing up your own valuable time. As an incentive to keep all of your business under the same roof, many banks will actually rebate much of your commercial loan's administration fee when the time comes to roll it over into the mortgage. You may receive a personal mortgage with no points, or you may even receive rebate points that you can apply to the principal.

Throughout your planning process, involve local banking professionals and ask your builder about positive experiences they have enjoyed on past projects with your contender lenders.

Kevin Adelsberg is a writer for FDLoans.com. For additional articles and an extensive resource for everything about loans, please visit us at http://www.FDLoans.com

---

Home Loans for Credit Challenged Borrowers

Just because you have negative items on your credit report... Read More

Ending Your Private Mortgage Insurance Early

Private mortgage insurance, or PMI, is the safety net of... Read More

Option ARM Mortgage Loan - Is This Really for You?

What happened to the days of a 15 or 30... Read More

Sub-Prime Mortgage Loans - Things You Should Know About Sub-Prime Mortgages

Sub-prime mortgages are not that much different from average mortgages.... Read More

What On Earth are Home Equity Loans?

Home equity loans are one of the most common types... Read More

What You Dont Know About The Real Estate Process, Some Inside Secrets

Some people in the real estate industry have a terrible... Read More

Who Else is Ready to have Their Money Work Harder for Them?

What does it mean to refinance? Why would anyone want... Read More

Doing a California Refinance Online

Californians are passionate people. I know. I have lived in... Read More

Self Employed Mortgage Loan ? Getting a Mortgage When You?re Self Employed

Being self employed has many benefits. When you are self-employed,... Read More

First Time Home Buyer Loans Made Easy

When it comes to firsttime home buyer loans, a little... Read More

Home Mortgages: Should You Apply Now?

If you're thinking about applying for a new mortgage or... Read More

Mortgage Brokers or Banks: Which is Right For You?

When you're looking for a home loan, you might work... Read More

No Money Down Home Loan

Are you in the market to purchase a home but... Read More

Escrow Accounts, Do You Absolutely Need One?

With escrow accounts the money for your home insurance and... Read More

Be Prepared when Seeking a Mortgage

When you're looking for a mortgage, whether it's a first... Read More

Online Mortgage in UK - Introducing the Best Mortgage Plan Across UK

Add the term 'online' and it will open for you... Read More

What is a Flexible Mortgage?

'Flexible mortgage' is a term that's used a lot, but... Read More

Buying A Home After Bankruptcy - Get A Mortgage Loan After Bankruptcy

If you have a recent bankruptcy on your credit and... Read More

What is a Tracker Mortgage?

A tracker mortgage 'tracks' the Bank of England base rate,... Read More

Mortgages - Which Loan is Right For You

When buying a home, you need to take a home... Read More

5 Home Buying Essentials

Purchasing a home involves certain important, even essential, steps that... Read More

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Have you decided to refinance your home or apply for... Read More

What is a Reverse Mortgage?

Simply stated, a reverse mortgage is a loan that enables... Read More

Bankruptcy and Buying a Home

Filing bankruptcy is a stressful time in a person's life.... Read More

How Homeowner Can Save Their Home From Foreclosure

Drive around and see how many signs you see that... Read More

Florida Refinance - Refinancing in Florida

The decision to buy a home in Florida can be... Read More

Helpful Mortgage Advice

Mortgage advice overwhelming you? Many people get advice from everyone... Read More

Mortgage Free In 15 Years!

Imagine paying your mortgage off in 15 years! Think of... Read More

Home Loan Confusion Continues

Unfortunately, most Americans still do not understand how home loans... Read More

Adjustable Rate Mortgage - How They Work?

How does an ARM work.The borrowers interest rate is determined... Read More

Making Sense of Mortgage Speak

Applying for a home loan can be overwhelming. You will... Read More

How to Find Cheap Home Improvement Loans

If you have home improvements that you'd like to see... Read More

Apply For Home Mortgage Loan Online With Bad Credit - Things To Consider

So, you've found the perfect home. You've already decided where... Read More