Gibson HomeBuilders

This is a critical concern and generally the first issue to be addressed. How will I pay for my new custom home? There are options open to exploration and we will outline a few.

First things first! You have to have a house design and land. No, you do not need to purchase your land yet. Just bfind the lot you want and get details from the owner. Later we will make suggestions about how to get the house design you want. The purchase of the land can be rolled into the financing package for the house. Once you have a design and lot we have a professional appraisal prepared to determine the value of the completed property.

You will need cash for any initial deposits on the land, for appraisals, copying blueprints, architect design fees, and/or CAD charges. Once we have the blueprints finished, an appraisal, and a deposit on a lot, it is time to choose your financing.

Based on the appraisal, the lending options are as follows:

One-time close
This is offered by many mortgage companies. All the costs for construction and the land are determined and a mortgage is completed. You only have one closing on the construction. This type of mortgage generally takes much longer to process and once you have locked in an amount, it is exceedingly difficult to get additional funds for anything you may want to add later. One closing is appealing but the mortgage reduces your flexibility.

Interim financing
Based on the appraisal of the design and land, the lending institution provides 80%-90% of the appraised amount to build your house. Upon completion, you convert the interim to a permanent mortgage. Not all lending institutions offer the permanent mortgage, so you may find yourself out shopping for a mortgage once the house is complete. Generally you have a year to complete your house and convert to a permanent mortgage.

Two-time close
Working with a broker, this is our personal favorite. The broker finds interim financing and permanent mortgage. This financing method gives you a personal representative that will walk you through the financing process. It is a little more expensive, but the service and support is definitely worth the expense.

Bridge Loan
If you have not sold your house yet, a bridge loan will cover the time gap while you wait for your home to sell. Therefore, if you are under a time constraint there is an option to begin construction before you have your equity.

Get three bids for your financing. This is a long-term relationship and you need to shop for the best possible relationship. We have successfully worked with many banks and brokers and will work with you to find the financial options for your situation.