House Construction Loan
What is covered under a construction loan?
My husband and I are considering building our own home. We have gone to the bank and know the basics of the loan itself but we were wondering what is covered under a construction loan. Are we able to buy things to finish the house such as appliances (stove, refrigerator, etc.) or does that have to be bought on our own? Can we buy furniture? I’m sure that this may depend on the banks rules but maybe someone could give us some idea of what we are getting into. Any help would be appreciated!
Thanks!
It covers 75% of your estimated construction costs, you give them the 25% up front. The structure is covered, as well as a driveway and installed appliances. No furniture, nothing not literally attached to the building. You will have a problem once you complete though, as you have to convert to a conventional loan, and there is just no way your house will appraise for 75% of the building costs. Maybe half, if you are freaking lucky. The monthly fees for not converting or not completing on time will be killer. MANY people loose their custom houses before they even move in.