To finance a major renovation, the Karandikars — she is a full-time real estate agent, and he is a high school math teacher and also an agent, part time — got a $450,000 construction loan from First Horizon, a home loan lender, which also took over the couple’s existing mortgage. When the house is done, the total loan will be $1.2 million. Interest on the final loan, to be closed when the house is finished, will be “a half point or a point over the going rate at the time,” said Mr. Karandikar, who estimates monthly loan payments of $6,650. The Loan Officer Guide, Vol. I (Second Edition)

A dream for many Americans, or a sudden challenge for those who found themselves in the path of a hurricane last year, building a house is expensive. Most people have to borrow, but even if they are flush — millionaires, or couples who have sold a house and want to reinvest — they may still want to avail themselves of a construction loan. It’s an effective way to enlist the financial expertise of a banker. “You could hire your own inspector, escrow agent or real estate attorney who might help with disbursement of funds,” Greg McBride, a senior financial analyst at Bankrate.com, which tracks banking data, said. But, he said, “the whole process of building a house is not a battle you want to do on your own.”

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