Ever dreamed of building a brand-new Northwestern Wisconsin home? Construction loans are harder to qualify for than a typical mortgage, but knowing something about the process can help you prepare. Here are the basics!
Lenders prefer if you own the lot free and clear, as it provides some collateral in the deal. However, there are lenders who will finance both the land purchase and the home construction together. In most cases lenders prefer 20% down, but if your credit is very good, you may qualify with less.
Your construction loan has to cover many needs. This includes the blueprints, permits, labor costs, construction materials, site preparation, well, septic and so on. The builder will provide written estimates for your lender’s evaluation. The lender may order a “Plan and Specs” appraisal to project the market value of the finished home.
Your construction loan will usually involve interest-only payments for a 12-month period. During this time, the builder will take “draws” from the construction loan for each major phase of the project. Once the home is complete and there are no further payments due to the builder, your construction loan is converted or refinanced into a normal mortgage.
We can help you find the ideal Northwestern WI land for your new home site. We can refer you to quality builders and lenders, too! Six Lakes Realty is a locally-owned family business with over 40 years of experience. Contact us today for friendly, hometown service!
Six Lakes Realty
Office: (715) 924-4806