LBI Real Estate New Home Mortgages
Long Beach Island Real Estate New Construction Financing 
Long Beach Island Real Estate New Construction Financing 
Long Beach Island Real Estate New Construction Financing
Building a New Home in the Long Beach Island Real Estate Market
Building a new home on Long Beach Island can offer an excellent investment opportunity. There are many building sites available in the local real estate market, and building a new home can give you a sizable equity position. To put that into a real-world example, if the purchase of the land and the cost of building the house costs $1 million, the new home should be worth approximately $1,300,000 in the LBI real estate market. While building offers many advantages, one hardship has to do with financing. Construction loans operate under different guidelines, which can make financing more difficult. Understanding Long Beach Island Real Estate New Construction Financing is a crucial step to investment on LBI. There are a few common elements present in most construction loans. They are:
- The interest rate will usually be higher than a conventional loan
- Construction loans generally are interest only
- Depending on the lender, a construction loan may roll over into a conventional loan once the project is complete
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Long Beach Island Real Estate New Construction Financing
It is always best to speak with a lender as rates, terms, etc. will vary greatly. Generally speaking, regardless of a credit score, income, or debt level in most cases, the interest rate will be much higher on a construction loan than a conventional loan. This higher interest rate is because construction mortgages are considered investment products with a higher level of risk. The higher interest rate is partly offset by the fact that the interest is charged only on the amount of money that has been used instead in the entire loan balance. For example, Let’s assume you borrow $400,000 for a construction loan, and that loan is broken into eight $50,000 payments. Typically you would only pay interest on each amount as you draw on it. This cycle will continue until the project is completed and the loan has been rolled over into a conventional loan. Most construction loans are interest only. Based on that, the payments you are making do not diminish the principal balance.
Building in the Long Beach Island Real Estate Market
It is necessary to point out that I am a real estate agent and not a mortgage broker. It is my recommendation to work with a local lender who understands the LBI real estate market and the benefits of investing in new construction. Working with local professionals can make a somewhat complicated process far more manageable. I strongly encourage all homebuyers in the LBI real estate market to consider building a new home if your resources allow for it. Building a new home not only generates instant equity, but it can also come closer to meeting your expectations while staying in budget. For more information about the LBI real estate market or LBI real estate construction financing, contact me, and I will respond right away. If you have any questions about buying, selling, or investing in the LBI real estate market, please do not hesitate to contact me.
By : Nathan Colmer |LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
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