From exterior aesthetic to interior functionality, a custom home is the optimal way to finally own a structure that meets all of your expectations. One of the biggest concerns for many individuals before beginning the design process is financing. When purchasing an already existing home, you simply apply for a traditional mortgage loan, but when you're building your own home, the financing process isn't quite as straightforward. In most cases, you need to apply for a construction loan.

The construction loan is designed to cover the various costs associated with the professional design process as well as the actual building of the structure. For this type of loan, most lenders require a more in-depth application process, and unlike a standard mortgage, the funds are typically dispersed to your custom home contractor in segments that correlate with each component of the project. As far as construction completion, you can expect a deadline of 12 months for the entirety of the project to be completed.

When you apply for a construction loan for a custom home, you need to approach the lender with a clear picture of the finished project. Not only should you provide all the standard employment and financial documentation, but you also need to showcase a detailed plan of action. This report should include a realistic timeline as well as a complete breakdown of the expected costs of the project. If you already own a piece of land, you can utilize this as collateral for your loan, but if you don't, they may require that you provide a certain percentage of the overall cost out of pocket.

To help individuals avoid double housing costs, most lenders only require interest payments throughout this period until the project is completed. Upon completion, you are still required to pay closing costs as you would with a traditional home purchase, but then your construction loan will be transferred to a permanent mortgage for your desired term.

If you're ready to build your dream home, contact Kirchner Custom Builders. The La Crosse, WI, home contractor specializes in designing and building custom homes that meet all of your needs. From helping you locate land to finalizing designs, the team is with you every step of the way. Begin the process today by calling (608) 782-3087, and view some of their previous projects for inspiration by visiting their online gallery.