Houston Texas construction loans are usually the best way to build a new property or refurbish an existing one. These types of loans are usually available through a variety of sources, including credit unions, regional banks, national Banks, as well as specialty lenders. Better still, construction loans are structured in ways that help specific borrower needs. Read on to learn more about construction loans in Houston Texas and what you need to know.
Houston Texas construction loans are generally made up of four types. However, there are more specialized types of financing, depending on the situation. That being said, two kinds of construction loans are the most common and popular, while two others are for more particular situations. Here’s what you need to know about Houston Texas construction loans:
- The construction to permanent loan. This type of loan is probably the most used because it’s the most comprehensive and easiest one. Borrowers finance the construction of a new residence and it finances the building, then becomes a traditional mortgage that can range from 15 to 30 years.
- The remodeling or renovation loan. You probably understand what this loan is due to its name. It is for rehabilitating or refurbishing an existing property, in order to make it functional, comfortable, and up to date.
- The owner-builder construction loan. This loan requires that the borrower also be a licensed contractor who can perform all or most of the work himself or herself.
- The construction only loan. This loan is limited only to financing the building of a residence, and therefore, a mortgage is needed thereafter.