The best way to finance a final loan on new construction financing is a conventional loan. The easiest way is to have a normal construction purchase contract between you the customer and the contractor. It will spell out total costs and exact agreement. The contractor then gets the construction loan and you are just responsible for the final loan.
If however, you own the lot where the construction is to take place, then you will also need to be on the construction loan. You will need to have owned the lot for at least 120 days before closing on the final conventional loan. Then the final conventional loan will pay off the construction loan in full. It would then be considered a rate and term refinance, and not a cash out refinance.
Whatever you do, make sure the contractor is licensed to do business in your state. Choose a contractor who has other houses that are complete that you can look at. Choose a contractor who has been recommended by friends, family, and other professionals such as lenders and realtors. As always check your local Better Business Bureau to see what kind of rating they have.
Last but not least, enjoy your new home!
For more information on new construction financing,
I can be contacted at:
DEPENDABLE MORTGAGE CO.
Rhonda Sherman, Owner
License # 100008357 NMLS # 381084
145 Grand Avenue, Suite B
Grand Junction, CO. 81501
Office: (970) 257-1502 or Cell: (970) 250-8613
Website: Dependable Mortgage Co.
Regulated by the Division of Real Estate
An Equal Housing Lender