It is customary when building a new custom
home to finance the costs of construction through a bank using a temporary loan in place
only while the house is still under construction. These are called
"Interim Loans." Banks usually charge an
origination fee in addition to other fees and the interest rate they charge is normally a
variable rate based on the Prime Lending Rate plus a pre-determined profit
margin. Once the house is finished, you replace the Interim Loan
with a "Permanent Loan" from some other financial
institution. Utilizing this customary method of financing you will incur
two (2) sets of closing costs, fees, etc. By allowing Bright Mortgage to
provide you with a "One-Time Close" loan, Bright
Mortgage will arrange to finance the cost associated with the actual construction as well
as the permanent financing subsequent to completion with only one (1) set of costs.
*Important Fact This could allow you to
negotiate a more attractive contract price with your builder because he has
no interest to pay during the time it takes for construction.
And....YOU deduct the interest off your taxes ! |
