Understanding Construction Loans and the LBI NJ Real Estate Market on Long Beach Island
Construction Loans on Long Beach Island New JerseyThe LBI Real Estate Market
The real estate market on Long Beach Island consists of many different styles of homes in a wide variety of price ranges and locations. Unlike many other real estate market, Long Beach Island sees a great deal of new construction. Typically, this takes place in the form of the purchase of an existing older property, for example a Cape Cod style home, demolition of the original structure and then building a new dwelling on the property. While this has been in play for decades on Long Beach Island, Hurricane Sandy forced a major increase in new construction on Long Beach Island as many homeowners decided to build a new house rather than repair their storm damaged dwelling. This has lead to an abundance of questions concerning Construction Loans on Long Beach Island New Jersey and the LBI real estate market.
Construction Loans on Long Beach Island New Jersey and the LBI NJ Real Estate Market
Construction loans differ from a conventional loan in many ways. The terms and conditions of a construction loan will depend greatly on the individual applying for the loan and the institution offering the product but in general there are a few “standards” to go by. For example:
- Construction loans on Long Beach Island NJ and elsewhere tend to be interest only loans with the balance due upon an issuance of a Certificate of Occupancy
- Construction loans typically carry a slightly higher interest rate and may be an adjustable rate mortgage
- Money is not given up front but rather in a series of “draws” for each stage of the construction project. It is common for the homeowner, the builder and the lender to establish this timeline prior to the loan being granted.
- Construction Loans on Long Beach Island New Jersey are not meant to be permanent. They are designed to fit a specific need and then a new mortgage be taken out on the property (which is typically a conventional loan)
It is important to understand the ins and outs of Construction Loans on Long Beach Island New Jersey and therefore it is best to speak with a lender who offers this kind of specific product. Construction loans can be a very effective way to purchase a property on Long Beach Island and build a new home thus attaining positive equity almost immediately. Given their differences from a conventional loan, it is important to understand the terms and conditions as Construction Loans on Long Beach Island New Jersey are not for all buyers in all situations! There are other similar loan types (for example a homestyle loan which is a renovation loan) that may be better fit depending on the needs of the individual.
Buying on Long Beach Island NJ
There are some excellent buying opportunities on LBI, especially in the “tear down” category. There are still storm damaged homes for sale on Long Beach Island and these are excellent candidates for Construction Loans on Long Beach Island New Jersey. By purchasing an older home and building new construction, you can often times beat the market (in other words buy and build for less than you could buy a similar house finished). For more information about Construction Loans on Long Beach Island New Jersey please do not hesitate to contact me, Nathan Colmer and I will be happy to help!
Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
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