One of the most challenging aspects of the home-buying process is getting access to financing. Securing a loan can be even more difficult when you’re planning to build a house from the ground up instead of getting a mortgage to purchase an existing property.
If you’re building instead of buying the home of your dreams, here are some things that you’ll need to keep in mind.
1. You’ll Need a Construction Loan
Conventional mortgage loans are issued when there’s a tangible asset that can be used as collateral. If you fall behind on your mortgage payments, the bank can take the house you purchased and sell it to recoup the cost of their investment.
When you’re building a house, on the other hand, the home doesn’t physically exist. So you’ll need to…