Posted on: 15th May, 2010 06:45 am
Hello,
I'm planning on building a new home, and looking at all the construction loan options I'm seeing a significant amount of closing costs (especially the two-close loan options). However, if the economics are compelling, I could probably scrape up enough savings money to pay for the full construction amount. My question is would this self-financed option for construction be a good option, or does having a lender in place for the construction process provide too many benefits vs self-funding, and therefore would be worth the associated costs? thanks
I'm planning on building a new home, and looking at all the construction loan options I'm seeing a significant amount of closing costs (especially the two-close loan options). However, if the economics are compelling, I could probably scrape up enough savings money to pay for the full construction amount. My question is would this self-financed option for construction be a good option, or does having a lender in place for the construction process provide too many benefits vs self-funding, and therefore would be worth the associated costs? thanks
The option of self-financing is a good one in my opinion. You won't be liable for any lender for the loan. If you go for a construction loan, you would be liable for the mortgage payments and other associated costs. After the end of the term, if you're unable to pay off the loan, then the lender can foreclose the property. In case of the self-finance, no one would foreclose the property.