Funding your Future: Should you build a home or buy one?

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Danielle Darke, a Loan Officer for Cyprus Credit Union that specializes in construction/lot loans lead us through the process of deciding to buy or build a home.

How is the process of building a home different than a typical mortgage?
• There are typically two routes you can take:
o You can buy from a builder who already has plots and design options. In this case, we can help someone get pre-approved.
o You can have a completely customized experience, which is what I focus on.
• For this the process includes:
o Finding a lot
o Obtaining a lot and/or construction loan
o Securing a builder and designing your home
o Once built, obtain a mortgage

How is a lot or construction loan different from a typical mortgage?
• We can bundle lot & construction into a single loan
• Construction loans are for the 9 - 12 months of building time.
o Interest rates often vary depending on the length so it`s important to make sure your builder is committed to the agreed upon timelines.
• Once a home is nearing completion, we`ll begin the mortgage process about a month ahead so that the mortgage can close as soon as possible to the completion date.
• Once a city issues a Certificate of Occupancy is when a construction loan should convert to a mortgage.

It sounds like having a good builder is important to making sure your loan stays within your terms. How would you recommend finding a good builder?
• Do your homework
• Get referrals, talk to people who have used them
• Check to make sure they are licensed and do not have complaints submitted

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