How To Get A Loan For A Custom Home in Mid-Missouri
Tips for Financing a Custom Built Home in Mid-Missouri
Have you been thinking of your dream home nonstop lately, but worried about money? We’ve all been there. As of today, mortgage rates are about 5.125% for a 30-year fixed plan in Missouri! With a custom home construction loan, it’s a lot different than your average mortgage. Before the mortgage transaction even begins, you have to budget for the land space and the custom home construction. But as we know here at Watts Construction, there are some tips to simplify the process. If you want to get a loan for a custom home in mid-Missouri, there’s a lot you need to know.
Make Sure You’re Confident in Your Custom Home Contractor
Before you start biting off more than you can chew, find a reputable custom home builder in mid-Missouri. A place like Watts Construction can lead you to banks in the area that allow custom home construction loans. You should also make sure the contractor can meet your design needs in a timely manner. For the most accurate price plan with a custom home loan, it’s best to outline a general design with your contractor prior to meeting a lender. If the lender has a rough estimate of the home from the beginning, the loan process will run a lot smoother.
Watts Construction will make sure you don’t regret your investment with us. We offer accessibility features, advanced security, automation systems, and more! Watts Construction also offers free estimates when you plan a meeting with us.
Consult an expert on Missouri’s home loan interest rates
Since construction loans are a little different from mortgage loans, several banks are going to have their own approach. Make sure you’re setting up an appointment with someone who has experience in this specific area. This is a big commitment; there’s nothing wrong with demanding the best! Any lender will tell you that a custom home construction loan requires a larger down payment than the typical mortgage, about 20-30% of the loan amount. For a basic overview, here are a few different ways a construction loan can go:
Construction-to-permanent loans on a custom home
This loan type, C2P for short, involves changing into a permanent mortgage loan after the custom home is built. Once the construction loan ends and the mortgage begins, home loan interest rates are applied.
Construction-only loans on a custom home
With a construction-only loan, everything must be paid off by the end of construction. The lender provides only the amount needed to build the home, and the funds are disbursed based on the completion percentage of the project. For this method, you need to be prequalified by a lender and ensure that you can pay that money upfront. This option is recommended if you have a secure money situation or a large cash reserve.
Renovation construction loan for home remodeling
Maybe you’re looking to remodel your custom home or make some additions with Watts Construction. In this case, a renovation construction loan is your go-to option. With a renovation construction loan, you’re paying the price for it on your mortgage. The loan total is determined by your mid-Missouri home’s value after these renovations are applied. If you’d rather not stray too far from a traditional mortgage, a renovation construction loan is your safest option.
Start a Custom Home Construction Loan with Watts Construction in Mid-Missouri
Since 1997, Watts Construction has been a trusted custom home contractor to central Missourians. We take the time to understand your custom home financing, and we will make it our duty to give you the best deal on your custom home construction loan. For a lifelong partnership and a high-quality home, call Watts Construction or send us a message!
