From Blueprint to Reality: The Construction Financing Process

In this episode of Your Money. Your Mission., Kelly Mould is joined by Loren Fellows, Vice President, Mortgage Production Manager from Johnson Financial Group, along with Zach Knutson, Managing Partner of Next Generation, a builder, general contractor and real estate developer located in Southern Wisconsin.

Building vs. Buying: What's the Difference?

Building a new home involves partnering with a builder like Zach to design and create a home according to your exact specifications. On the other hand, buying an existing home may involve compromises or future renovations. Building may cost more upfront but can provide long-term savings. 

Who's Building Their Dream Home?

Building a home is hot right now specifically among Baby Boomers downsizing from large homes and move-up buyers looking to customize their next house. Zach's team designs homes with aging in mind, incorporating features for long-term comfort and accessibility.

Navigating the Construction Financing Process

Construction financing typically involves a two-phase process: short-term financing for the build and long-term financing once the construction is complete. Johnson Financial Goup's streamlined approach and Next Generation’s efficient building timeline ensure a smooth process for clients.

Options for Construction Loans

There are various options for construction financing, including construction-to-perm loans, also known as a one-time close - that can save you time and money, two-time close loans for jumbo construction projects and turnkey financing for move-in-ready homes. Each option offers different benefits based on the client's needs and preferences.

Building on Your Own Lot

If you already own a lot, you can leverage the equity towards the down payment on your construction loan. Zach's team works closely with clients who have their own lots, streamlining the process and ensuring a seamless experience.

Preparing for the Construction Financing Journey

To qualify for construction financing, you'll need to provide income and asset documentation, as well as details about your lot and builder contract. Patience and trust in your builder and lender are crucial throughout the process.

Final Thoughts: Making Your Dream Home a Reality

Building a new home offers customization, energy efficiency and long-term value. Whether you're a first-time homebuyer or looking for your next home, exploring construction financing options could unlock the home of your dreams.