Facts regarding Home Construction Loan
Home Construction loan is a loan that is available for funding the renovation of an existing home or construction of a new home on a plot. It is often times confused with home purchase loan; however, there is a wide difference between the terms and conditions of the two loans. In this article, www.makaan.com elaborates on the facts regarding home construction loan.
Construction loans are provided by most of the prominent banks and financial institutes. Generally, there are two types of construction loans. The first one is provided as an all in one loan and changes into a home loan upon completion of the home. The other one is the construction only loan that is due when the construction is complete and then the loan must be paid off. The first type of loan is generally taken by individuals and the second one is availed by builders as construction of a group or society of properties takes time and the developers get the time and arrange the money to pay off the loan.
In a construction loan, the amount is disbursed as needed during the various stages of construction. Typically, a borrower has 12 months to complete the entire residential construction job. Therefore, the interest is charged according to the money that is handed over during that time.
The documents required for the home construction loan are less in number compared to the ones required for home purchase loan. Thus, the scanning of the documents and sanction of the loan is also an easier process. The major information required by the lender in case of the loan is in terms of the type of the home that is going to be built, material that is to be used for construction, expense to be incurred on the material and labor and the current and future value of the land.
The home construction loan allows you to receive the funding and build the home of your dreams and not settle for one built according to the needs and desires of another individual.