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California construction loans

Building a home requires an extensive amount of time and expenses then buying a home. If you are planning to construct a home in California then, you will have a number of options to choose regarding the construction loan types and lenders. Before you go out to obtain the construction loan there are however few things that you need to do first.

 

You must know how much you are going to spend or pay for the major items like the land cost whether it is already ready and developed for your home, the house design, blue-print and the architectural fees, the materials cost as well as of the labour and the construction. You even need to know the principal cost and the interest rates on the construction mortgage loan that you have been planning to take.

 

The total amount of these features will allow you to determine the amount you will need to complete the project. However you will come to know that the traditional bank loans for construction projects are often hard to obtain, especially for an individual constructing a first house. This will happen even when you have an excellent credit record.

 

The reason why this happens is that construction projects are often notorious in terms of overrun, new cost items, unexpected delays can caught with the owner and the bank off guard. However there are lots of other construction loan lenders that offer the loan to most people in the most competitive rates. If you are serious about getting a house built then, you can see the following construction loan types found in California.

 

California construction loan types

 

There are quite a few options available for the people looking for a construction loan in California.

 

Owner Builder loans: This is a construction loan that will help you to control costs, schedule time and gain the equity at the completion of the completion. This is for the homeowners who want to be the contractor themselves. The owner builders are mostly offered for the construction of vacation home or a primary residence. However, this construction loan type is available for those borrowers whose credit score are low as 620. The lender will require a person who is not a licensed contractor or any employer of a construction related field to hire a site supervisor to help with the home building.

 

Lot or Land loan: This is a loan provided for the refinance or purchase of land. If you have found a perfect lot and need some time for your home designs and hire a constructor then, the purchase lot loan is a better choice. This loan is available for second home or primary residences.

 

One time close loan: The traditional construction loans were offered as a short term loan that will finance only the construction loan. You will however find a combination loan programs that has multiple loans wrap into a single application and closing. They are known as the one time close loan.

 

Remodelling or rehab loans: This is a loan that will help you to remodel your current existing home or help purchase and rehabilitate a new house.

 

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