Building a Home in Katy, Texas: How Does a Construction Loan Work?
At the outset, you need to understand that the application process of a home construction loan is not markedly different from the process involved in obtaining a more traditional Katy home mortgage loan. The differences between the two types of financing actually arise in the way the proceeds from the home loan are paid out.
When it comes to a traditional home mortgage loan, the proceeds from the loan are paid by the lender to the seller of the property (and to a prior home mortgage lender as required) in one lump sum at the time of the closing. On the other hand, when it comes to a construction loan for a new home in Katy, certain benchmarks are established pursuant to the terms and conditions of the home loan. Payments are made as designated within the construction loan agreement to appropriate contractors and so forth at different points in time during the home construction process. This continues until the construction of your new Katy home is completed when a final payment will be paid by the construction loan lender.
If you are interesting in purchasing a new home in Katy, Cinco Ranch, Grand Lakes, Seven Meadows, Grayson Lakes or even Kelliwood, be sure to contact me, Steve Reddell, for assistance.
Filed under: Builders, Buyers, Katy Family Homes
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