Loan plans



Ten years ago it was very difficult to find any type of loan-plans for owner builders. Today, it is easy to find a plan that suits your needs.

Undoubtedly, we live in the days of easy credit. History has taught us that easy credit is a precursor to hard economic conditions. That's just one more reason why we should be striving to get more equity in our homes.

Owner builders can get loans that were impossible to secure only a decade ago. For instance, it was almost carved in stone that to build a house, you would need two loans. The construction loan and then the permanent loan.

Now, there are several lending institutions that offer the two loans rolled into one. This is usually called a Construction-To-Permanent loan or a CTP loan.

There are many variations of these kinds of loan-plans, but they are common in the area that they lend money for construction for 6 to 12 months, then the loan converts to a normal Home Mortgage Loan.

If you don't have any money at all and you don't have any land or collateral, or even good credit, you probably won't be able to get this kind of loan. On the other hand, if you do qualify for a loan of this type, but have no land or anything, you'll probably have to hire subcontractors to do all the building. These types of loans need to at least have the security of knowing the home will be done right.

The owner builder that saves the most money and gets the most equity out of his or her home is of course the builder that does all the work. It's still difficult for owner builders to get loans if they plan on doing all the work unless they already have a home started that has a fair amount of equity in it.

That's why I used credit cards to buy materials to get my house to the point where I could get a construction loan. This may be what many of you have to do as well.

If you do a good job on the foundation, framing work, sheathing and roof, you should easily have enough equity to get a construction loan to finish your home.

My plan to build a home works really well in this case. Everyone needs to learn how to build a house before they actually get started. My house book is perfect for even the most inexperienced builder.

Sweat Equity is a great guide to help owner builders get that first start. It helps teach how to get your home to the point where you can borrow whatever funds you need to finish it. That point only takes such a small amount to reach.

If you just do a search on "owner builder loans," you will find many loan-plans that are very helpful in getting you on your way.

construction
drywall mud

Continue reading here: Ideas to plan a house

Was this article helpful?

0 0