How To Finance An LBI Home Teardown

High Tides Digital Marketing
Mar 3, 2022
2 min read

Funding a New Construction in the Long Beach Island Real Estate Market

Long Beach Island Real Estate

Building a new home in the Long Beach Island real estate market can be the best possible option for those looking for their "dream home." You get to build your new home from scratch, and almost every detail will be yours to choose from. If this sounds like the best path for you, here are the details you need to know about financing a new home in the LBI real estate market.

How To Finance An LBI Home Teardown

Financing an LBI teardown involves many more complicated factors than a standard mortgage on Long Beach Island. You will need to find a lender that offers loans covering construction, demolition, and a traditional mortgage once the new LBI beach home is finished. A lender will want to see your new house plans and vet your builder. To receive the loan, the value of the property and the new house has to meet the lender's standards, and the builder needs to be approved by the bank.

To cover the costs of tearing down and rebuilding, the buyers will need to obtain a construction loan. This loan will typically roll over into a standard mortgage once the home construction is complete. This process is called a "one-time close" because the construction loan rolls over to your mortgage. The building and mortgage loans are often handled as one transaction. Therefore, you won't have to deal with separate closings under this type of loan program. Not only is this process more accessible, but it can also save thousands of dollars.

Funding a New Construction in the Long Beach Island Real Estate Market

Building a new home in the LBI real estate market can yield a substantial equity position, usually in the area of 20%-30%. All buyers in the LBI real estate market should, at least, consider such a project, and one of the first steps in this consideration is understanding how such a project is financed. If you have any questions about buying, selling or investing in the LBI real estate market, please do not hesitate to contact me.