What about financing home construction? Should you be considering financing home construction? And how is it that this is done? These are big questions if you are planning on building a house for yourselves. There is more than one way to finance the cost of home construction loans. You can go the route of two loans, this is a common way to finance home construction loans. With this strategy you will be taking out one loan for the home construction itself and another loan to pay off the first loan. This strategy will also have two different sets of closing costs, which can add up to a significant amount of money. It also means that you will be doing twice as much work because you will have to find two loans with good terms instead of only one. The other common way to finance construction costs is to get a combination loan. This is a loan that will become permanent only after the construction period is completed. There is a possibility that you will save money with a combination loan as you will not have to be dealing with more than one set of closing costs. You will still have to shop around for the loan with the best terms for you. Different companies offer different loans, some of the lenders out there will only offer one or the other type of loan while yet others offer both. You can find construction loans that range from 6 months to one year, all depending on the lender. And you can also find some really great adjustable rate loans, ones that reset every few months, in fact you will even find some that reset monthly. You will find that these construction loans come with several different fees. Not only are there closing costs, there are also points and construction fees. And most construction lenders will be keeping an eye on the construction process as it goes along, this also affects the price of the loan. If it is a combination loan that you are taking out you will most likely be able to get some of the fees that you paid for the construction loan to go towards the costs of the permanent one. This rebate factor can make it much more difficult for you to find out which is better the combination loan or the two loan plan. Your best option is to find a lender that will offer you really great rates on a combination loan. Not only is this method much simpler, it is hard to beat when you have good terms. If you are determined to try to compare the different types of loans you will have to remember to shop for both permanent loans as well as the construction loans at the same time. It is all about balance and loan terms and rates. You need to find the loan that will balance out the savings, it does not matter if you save on one loan only to be gouged on the other. There are many favorable factors of having the builder finance the construction of your home. For one you know that this person or company has the money to get it done right and if they are financing the work they also will be sure to get it done as fast as possible. They are not going to want to waste any time when it is their money that the time is costing them. If it was your money on the other had they would not have such motivation spurring them on to work harder. There are not that many drawbacks to builder financing but one is the murkiness of the thing. It will be hard if not impossible for you to know exactly how much this amount is because the cost is just part of the cost of the house. While you may get a quote from the builder you need to remember that they are simply estimating. They will always overshoot the cost and the time it will take them to complete construction. This is not such a big deal though, but what is important is that you realize that you cannot be comparing construction loans to builder financing. They are two completely different animals. Another thing to consider is that it can sometimes cost a builder more to get their loan that it would cost you, this also adds to the overall costs of the house. And the builder will have to have the title to the property in order to get he financing that they need. This alone has its costs. Each state is different but in many it can be quite expensive to transfer the title.