Building your own home can be the most exhilarating and accomplished feeling but it can also be a big pain in the neck. Ongoing payment negotiations with your contractors, additional materials, and other unexpected costs can result to delays because of inadequate funds. The various stages of constructing a house is very dynamic and it requires dynamic resources. You can be relieved of this dilemma by simply obtaining a construction mortgage loan. In the state of Florida, there are varied options to choose from.
How it works
Construction mortgage loans are perfect for building a residential dwelling and to help out the soon-to-be-homeowners in the various stages of homebuilding by securing funds. Approval of the loan in the same way that lenders approve of a mortgage (but without the existing collateral but eventually the completed home will become the collateral) will allow the start construction. During this period, payment terms will usually be on an interest only basis until the completion of the home. Upon completion, only the interest rate will be converted into a conventional mortgage program. Usually it is turned into a fixed-rate loan where the borrower pays the principal and interest rates at a fixed amount for the entire lifespan of the mortgage.
Example
Payment options
Like with fixed-rate mortgage loans, the terms could vary from short to long-term. The payment of amortization can vary from weekly, bi-weekly, monthly, to bi-monthly. Aside from schedule of payments, other options include a tiered mortgage scheme where different payment options, terms, amortization schedules, and rates are all under one mortgage. You can also pay off your mortgage quickly with pre-payment options that allow you to increase the payments of your original balance each year. A Match/Miss option is another alternative where you can match one or more payments and then miss a later payment schedule for each matched payment within the term.
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