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New York Construction Loans Let Your Build Your Dream House

New York Construction Loans Let Your Build Your Dream House

When you decide that you are going to build your own home from the ground up, there are some things that you need to think about. One of them is how you are going to pay for the construction. A traditional mortgage won\'t cover construction. For this you need to start looking into New York construction loans.

A construction loan is used for the construction of a new house or the renovation of an existing house. It doesn\'t cover the land that the house is being built on, you will have to get a separate loan for that. You will also need to make sure that the land that you are building on is in your name before you get your loan for construction.

While construction loans New York City will cover construction of a home, or renovation work, there are some things that it won\'t cover. It won\'t cover getting a co-op or condo. It also won\'t cover building a house on spec, or for commercial purposes. What it does cover is total new construction, rehabilitation, and major renovation. The home can be a primary home, secondary home, or investment property, like a rental.

New York construction loans are also known as one time close loans or construction to perm, or permanent, loans. The loan gets those names because it can switch from a loan used for construction to a more traditional mortgage type loan. It\'s called a one close loan because you only close on it once since it switches from the construction type to a mortgage type.

When you are looking at construction loans, you will want to know what the rates are, and if you will have to have any reserves. Well, the rates are the standard required rates. There is a chance that they can be waived, under certain circumstances, for more information about those circumstances, you will have to speak to your lender.

You will have to have a 5% reserve for a home that is being built from the ground up or a rehab that is non-structural rehab. For a remodel, you will have to have a 10% reserve. Like the rates, these reserves can be waived, in the right circumstances. Again, speak to your lender about those circumstances.