{"id":4836,"date":"2013-11-05T11:56:25","date_gmt":"2013-11-05T15:56:25","guid":{"rendered":"https:\/\/louisvillehomesblog.com\/?p=4836"},"modified":"2023-08-23T13:56:53","modified_gmt":"2023-08-23T13:56:53","slug":"want-build-louisville-dream-homes-dont-know-get-financing","status":"publish","type":"post","link":"https:\/\/trepryor.com\/blog\/want-build-louisville-dream-homes-dont-know-get-financing\/","title":{"rendered":"Want to Build Louisville Dream Homes But Don’t Know How to Get Financing?"},"content":{"rendered":"\n

When considering building your Louisville dream home<\/strong>, one of the first questions that comes up is,<\/p>\n\n\n\n

\n

\u201cHow do we get the money to build?\u201d<\/p>\n<\/blockquote>\n\n\n\n

\"Photo
Thinking about “Louisville dream homes”? Financing plays an important role.<\/figcaption><\/figure>\n\n\n\n\n\n\n\n

Most people need to borrow a substantial amount of money in order to build their dream home. Where and how the money is borrowed will determine if you pay a reasonable or an excessive amount for your new home.<\/p>\n\n\n\n

Get a Head Start<\/h2>\n\n\n\n

Before getting a loan you will need to know how much money it will take<\/em> to build your dream home.<\/p>\n\n\n\n

If you have a set of house plans<\/a> then a Louisville builder can give you an estimate for construction. This meeting with the builder is key because it can help determine if there are any design modifications that need to be made to stay within your desired budget.<\/p>\n\n\n\n

Let’s say the total for your lot and the house is valued at $300,000 by the lender for your long-term mortgage, assuming the land is valued at $60,000, you will need to borrow $240,000 for the building costs.<\/p>\n\n\n\n

(Editor’s Note: It’s common for the land to account for roughly 20% of the total cost.)<\/p>\n\n\n\n

This means you will probably<\/em> need to obtain a construction loan<\/strong>. A construction loan is a short-term loan that is used to pay for home construction throughout the building process. When the construction of the house is complete, the construction loan is paid in full, typically with the funds from your long-term mortgage.<\/p>\n\n\n\n

Construction loans are most often given to builders and developers. To obtain a personal construction loan<\/strong>, it is best to request it at the same time you arrange your long-term mortgage.<\/p>\n\n\n\n

Requesting both loans at the same time will make you a more desirable customer for the construction loan since you will be paying the institution interest for many years to come through your long-term mortgage. You might also find that you will be offered a lower interest rate for your construction loan when paired with the mortgage versus requesting a construction loan by itself.<\/p>\n\n\n\n

Before requesting home financing gather the following items:<\/p>\n\n\n\n