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Needing Construction Loans? Try Talking To Your Financial Services Advisor

With housing prices still falling in some areas I was going to put off building a new home on a lot that I got at a discount. It was not until I started to look at the interest rates on construction loans offered by some banks that made me rethink my decision. Many financial services companies have taken a beating in recent months, which has led to lower interest rates on all types of loans, including construction loans.

I went to talk to one of my financial services advisors about taking out construction loans and was told that as long as I was getting a loan to build my own home I could not ask for better interest rates. The rise in new housing starting in February, followed by a drop in March, has some builders thinking they should wait to see what the real estate markets do next.

Personally, I think that as long as housing prices stay low and new homes do not go up, construction costs will remain low. After all, material costs are a supply and demand industry, if there is no demand for construction materials the prices will remain low.

Then there is the cost of labor. Many people that work in the construction industry are currently out of work. Those that are still working are good at what they do. Getting the best contractor in my area is easier than it was when there was a housing boom. Most of the fly by night contractors have gone belly up, leaving only the best and well established contractors behind.

My financial services advisor told me that I was not the only customer he has talked to in recent weeks about construction loans. Apparently, there are a lot of people considering construction loans now. With so many different financial services companies willing to loan money on construction projects for individuals, he told me that getting a loan would not be hard.

To get construction loans from some of these financial services companies all I needed to do was to either have my land paid off or I needed to have at least ten to twenty percent of the total cost of the job upfront. He said that even if I did not have either he could still get me a loan, but I would pay a higher interest rate.