Custom-built homes offer a unique opportunity for homeowners to create a living space that perfectly fits their lifestyle and personal taste.
What exactly does “custom” mean here with regard to a house build?
A custom-built home is one where a client approaches a serviced lot or builder that has acquired serviced lots to sell.
However, these are not always typical “custom homes” as there is a set standard and predetermined design for the entire neighborhood.
Instead, you can request the design to have additional upgrades. The builder will then add any additional costs onto that of the home. For example, taking laminate countertops and upgrading to a granite countertop.
When it comes to financing a custom-built home, there are several mortgage options available:
Option 1: Construction Mortgage Loan
A short-term loan that provides funds for the building process. This loan option will get paid off once the home is complete and mortgage is refinanced. Ideal for those who want more control over the construction process and to ensure their home is to their exact specifications.
Option 2: Home Equity Loan
This type of mortgage allows homeowners to tap into the equity built up in their existing home to finance a custom-built home. Ideal for those who have a lot of equity in their current home that they want to use to finance their dream home.
Option 3: Traditional Mortgage
A long-term loan, typically used to purchase a finished home, may also be used to finance a custom-built home. Advantages include a fixed rate and long repayment period, making it easier for homeowners to budget for monthly payments.
Financing a custom-built home is a significant financial investment, but there are many options available to help make the process more manageable.
If the difference between a self-build and a custom build is confusing to you, don’t hesitate to contact Mortgage Suite to help you through the process.
