right now we rent a house and it is costing us 1100 a month. Its a big house. My wife and i would like to downsize and have lower monthly payments.
we were looking at a first time buyers loan and a construction loan.
How does either work.
Here are many first time home buyers programs available. You may start by calling the city Housing Office in your city or the county housing office<!–in the county in which you reside.If these offices don’t have the programs you are seeking they will be able to tell you what agency in their jurisdiction has them.
http://best-loans.awardspace.com/homebuyerprogram.htm
Once you have located the first time home buyers program and who operate it, that agency normally have a list of lenders, banks–>mortgage brokers or institutions that are authorize to administer the program. These agencies are normally listed on a pamphlet.
No tags
Kc Mrow · March 9, 2010 at 10:42 pm
In my opinion it would be better to go with a first time buyers loan than the const. loan, because you can get a fixed rate, and construction loans are variable and you sometimes have to wait to lock in your rate and as you can see with the economy right now ppl are losing their houses right and left due to this! Their rates went sky high before they could lock them in! First time buyers I think is the better option.
Construction loans are story loans. That means that the lender has to know the story behind the planned construction before they’re willing to loan you money. Because it’s a story loan, it’s not going to be standardized like mortgage loans underwritten to Freddie Mac or Fannie Mae guidelines. That said, there are some common features to a construction loan. Construction loans typically require interest-only payments during construction and become due upon completion. Completion for homeowners means that the house has its certificate of occupancy.
Construction loans are usually variable-rate loans priced at a spread to the prime rate or some other short-term interest rate. You, the contractor and the lender establish a draw schedule based on stages of construction, and interest is charged on the amount of money disbursed to date.
Another variable in construction loans is how much of the project cost the lender is willing to lend. If you already own the land, then that can be considered as equity on the construction loan.
Many homeowners use construction-to-permanent financing programs where the construction loan is converted to a mortgage loan after the certificate of occupancy is issued. The advantage is that you only have to have one application and one closing.
Depending on your view on interest rate trends, you could also purchase a rate-lock agreement valid through the expected completion of the construction. Just make sure you allow for the inevitable construction delays.
A construction loan, unlike a mortgage, isn’t meant to be around for a long time. If you’re taking out a $200,000 construction loan for six months and you pay an extra 0.5 percent on the loan, it costs you an additional $250. (Assumes an average $100,000 loan balance over a six-month construction period.)
You may be willing to pay a higher rate on the construction loan if you’re doing construction-to-permanent financing and can get better mortgage terms or a longer, better rate lock from that lender.
References :
bankrate.com
Celeste · March 9, 2010 at 11:09 pm
Here are many first time home buyers programs available. You may start by calling the city Housing Office in your city or the county housing office<!–in the county in which you reside.If these offices don’t have the programs you are seeking they will be able to tell you what agency in their jurisdiction has them.
http://best-loans.awardspace.com/homebuyerprogram.htm
Once you have located the first time home buyers program and who operate it, that agency normally have a list of lenders, banks–>mortgage brokers or institutions that are authorize to administer the program. These agencies are normally listed on a pamphlet.
References :