A Guide to Custom Home Financing
At Tailored by Woodhill, we understand that your dream home is unique, reflecting your personal style and preferences. While our move-in ready homes at Woodhill stand the test of time, we also offer an unparalleled custom-building experience for families who envision something truly one-of-a-kind. If you're considering a custom-built home, understanding the financing process is crucial. Here's what you need to know about securing financing for your dream home.
Land Financing
Unlike traditional home builders, Tailored by Woodhill recognizes that the perfect piece of land is a personal choice. While some builders may offer a portfolio of land lots, we believe in giving you the flexibility to choose your ideal location. In the case of finding your own land, you'll need to secure a land loan. Most banks and credit unions provide land loans, and the process typically involves a property inspection and appraisal. The good news is that this stage usually moves swiftly, with most land loans in place within 30 days.
Construction Financing
Once your land is secured, the next step is obtaining a construction loan. It's important to note that not all banks readily accommodate this type of financing, so you may need to shop around. Tailored by Woodhill guides you through the process, helping you navigate the necessary steps. You'll be required to submit building plans, a budget, and a contract to the bank. This information is crucial for the bank to accurately assess the value of your home before it even exists. With both land and construction loans in place, immediate payments will commence, so careful budgeting is essential.
After Construction Financing
Upon the completion of your custom home, the loan transitions into a long-term arrangement. There are two options for this transition:
Refinancing: This involves the bank ordering a new loan application and appraisal, transforming the construction loan into a traditional mortgage loan.
One-Time Close Loan: For a seamless transition, you can combine your construction and permanent loans into a "One-Time Close" loan. This option eliminates the need for additional appraisals. During the construction phase (typically 12 months), you make payments on the construction loan, and in the 13th month, the loan automatically transitions to your permanent loan.
Embarking on the journey of building a custom home with Tailored by Woodhill may involve a few additional steps in the financing process. However, when the result is a home that perfectly aligns with your vision, these extra steps are undoubtedly worth it. If you're curious to learn more about our custom home building process, contact us today. Your dream home awaits!