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Why use a Construcion Loan?

Why use a Construction Loan?

Building your dream home, though exciting, presents many challenges. Although you may be familiar with the traditional mortgage process, a construction loan includes additional elements of risk. In a typical construction project, the contractor will request funds when work is completed.

Many times a homeowner will build their dream home without the use of financial institution funds. There are various ways to pay your contractor, many people feel they should pay cash, use a home equity line of credit from another property or cash out an investment.

This presents unique challenges for the homeowner. The homeowner must manage the additional responsibility of ensuring all subcontractors and suppliers are paid in a timely fashion. The homeowner must also understand the statutory documentation requirements in their state. If the draw process is not properly managed and the contractor does not pay the subcontractors and suppliers, the homeowner may be subject to mechanics liens. To mitigate your risk throughout the fund control process, consider the benefits of a construction loan and the process. The construction process is a complicated one and the construction draw process will ensure all subcontractors and suppliers are paid so that you don't have to pay the bill twice.

Construction loan is a check and balance of the funds that are dispersed throughout the build of a new home. With the help of a lenders, inspectors and draw processing staff your construction loan funds are reasonable protected.

Troy Schuricht

7575 E Redfield Rd Suite 235 Scottsdale, AZ 85260 480-305-8905 - office 480-393-8801 - fax

http://www.communityfirstfinancial.com/

http://www.yourlendertroy.blogspot.com/

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