If your ideal home is not available in your preferred market, you can still realize your dream by constructing it ground-up with the help of a construction loan.

Often considered as specialty financing, a Construction Loan is a short-term loan that’s available for custom home building. It covers only (and only) the construction costs of the house and once the construction process is complete, the borrower needs to apply for another loan to complete the home furnishing process. The loan is usually given for a year and helps borrowers cover most, if not all, of the construction expenses – ones that are planned as well as those that come up all of a sudden.

Construction loans ensure that all building costs are covered on time and help you to prevent delays in the construction process. Upon completion of construction, the borrower can either refinance the construction loan into a permanent mortgage or apply for a new loan.