The Benefits Of Building Your Home With The Help Of Construction Loan


Almost everyone is dreaming of having their dream home someday, even those who purchase a ready for occupancy houses since they don’t have the power to customize the house. However, if your planning to have your home built from scratch, then it’s beneficial for you since you get the chance to customize your house based on your liking.

But building your home has its advantages and disadvantages such as you need to have a large amount of money on hand to finish the construction process. If you lack funds, you can always apply for a construction loan from fha construction loan texas.

To know more about the benefits that the fha construction loan texas can offer, we have listed five of them below.

You Can Build Your Dream House

As mentioned earlier, the advantage of construction loan over any other type of loan is that you get the chance to build a house based on your preference. However, make sure that you can afford the house that you want. Building a home that can cost you above of what you can afford can turn your house into a nightmare instead of a dream. So make sure only to build a house within your means.

Straightforward Approval


If you have a good credit score, a stable source of income and the money that can cover the 20 percent downpayment, then you will be most likely to get approved on your loan quickly. However, you still need to provide additional requirements, such as a blue book and a qualified builder. When finding a reputable builder, we highly recommend choosing from the National Association of Home Builders (NAHB).

Pay Only the Interest During Construction

Another advantage of the construction loan is that you will only have to pay the interest of the loaned amount during your house construction. It allows you to have all your resources to focus on the construction process. However, you must keep in mind that the lenders only give their borrowers a maximum of 12 months to complete the construction so you should talk to your builder and be strict when it comes to their deliverables.

Less Risk

There are two types of a construction loan that you could choose from, the Conventional Construction-to-Permanent loan, and the Stand-alone construction loan. Also, both of them comes with advantages and disadvantages. However, the Conventional Construction-to-Permanent loan is seemed to be the best choice over the other since it offers a fixed interest rate. It means that you get protection against an increasing interest rate.

Instant Home Equity Value

Another benefit of building your home from scratch is that your house can get instant home equity once the construction is finished. Usually, pre-built homes can take up at least 10 to 15 years to build home equity value, but your house once finished can get equity instantly. For example, the total construction cost of your house is $600,000, and then after the completion, it is valued $670,000. It means that your home created instant equity of $70,000.