If you are planning to build a home in Maryland, then a mortgage loan is not going to suffice. That will come in the second part of your home building. But first you need a custom home loan or a construction loan that will help you get the go ahead for constructing your home.

There are several lenders who can lend you Maryland (md) custom home loans. With these loans you can buy an old property and completely rebuild it from scratch into your new home, you can buy a plot of land and begin constructing your new home or if you are a developer, buy bulk properties to remodel. The possibilities are endless with Maryland (md) custom home loans.

 But as a buyer, what do you need to look for in these loans?

The loan

Ø      Most construction loans are low interest loans that are lent for a time period of 12 months during which the construction of the home has to be completed.

Ø      During this period, only the interest is charged on the loan and the amount becomes due immediately post completion and issue of certificate of occupancy.

This can also become the permanent financing for your home. Yes, now a combination of two loans is also available with most lenders. This means that now you only have to sign one set of documents and forget about re-qualifying, re-appraisals etc.

No more additional closing costs or additional documentation.

The requirements

Ø      The lender will require complete details about the project. This includes a resume from the general contractor, a completed builder’s application and the credit records of the borrower.

Ø      This implies that like other loans, your credit score is a crucial part of the lending process here too. Income and credit documentation will be a pre-requisite.

Ø      If you have bad credit record, then you need to work on improving this before applying for Maryland (md) custom home loans.

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