Shopping for an Owner Builder Construction Loan: The Features You Need to Look For Before Building
February 27, 2009 · Filed Under Construction · Comments Off
Most new homes in America are built by builders or developers who build the new home with their own money or lines of credit in order to sell the finished home to the new customer. The new buyer simply obtains a regular “purchase money” loan and buys the house.
This is the simplest form of construction financing. Of course, the builder’s borrowing costs are built into the price the new home buyer pays.
Increasingly, however, this form of financing is becoming rarer. Often, builders are becoming more reluctant to use their own funds to build for someone else as their banks are tightening their lines of credit and making it more difficult and expensive for them to get the needed funds.
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