Construction Loans 101: Everything You Need to Know
There are different types of construction loans that you may not have known existed. When you are in the market for a va construction loan to fund your construction project, it is important to understand all of your options.
Bridge Loans: A bridge loan is a type of short-term loan that is taken out for a specific purpose, such as the purchase or renovation of a property. It is ideal for those who need to access funds quickly, like when contractors are waiting on other loans to be approved. This can help prevent delays in the project and keep it moving forward without any additional financial strain.
Construction-to-Permanent Loans: These types of loans provide you with funding throughout the entire construction process. Once construction is complete and all necessary inspections have been performed, you can then move into the permanent financing stage where you will repay the loan over time in regular installments.
Construction-Only Loans: If you don’t plan to stay in the home once it is complete, a construction-only loan may be right for you. This type of loan will provide you with funding for the duration of the building process, but unlike a construction-to-permanent loan, there won’t be any installment payments required afterwards.
Home Equity Loans: Last but not least, home equity loans can also be used as a form of construction financing. These types of loans are based on your current equity in the property and provide access to capital that can then be used towards renovations or additions to the property.
Now that you know all about the different types of construction loans available to you, make sure to do your research and choose the one that best suits your needs. Assessing your financial standing and finding the right lender is key in getting the best deal possible.