Where to Look for Money to Build Your Dream Home
Pretty much everyone has an ideal in mind when it comes to the perfect place to hang a hat, rest a head, raise a family, or escape from the madding crowd. Or at the very least we have a clear idea of what we like and dislike when it comes to a dwelling. For some people, a Victorian structure full of old-world charm and delicate embellishments is just right, while others prefer the clean lines and spare architecture of modern homes. You might like a place in the mountains while your friends dream of falling asleep to the sound of the ocean. The point is that we all have a sort of dream home in mind, and some of us want to turn it into a reality by purchasing a parcel of land and building the house that’s in our heads. Unfortunately, this does require a fair amount of funding to pull off, and securing a loan to build a home might not be as easy as purchasing property that already has inherent value. So here are just a few places you might want to turn in search of the money you need for your project.
The first place to look is in your current home, and this can be taken both literally and figuratively. If, for example, you own a home, then selling at a profit could certainly get you the funds you need to start building your dream home. Or you might be able to take out a home equity line and funnel it into building a second property. Either way, you may need to take out further loans to finish your building project, but the home you currently own could certainly provide you with the best opportunity for funding. Of course, you can also find value within your four walls by selling off heirloom furniture, valuable jewelry, rare artwork, or other collectible items that will fetch a good price. This might not totally fund your construction project, but it could give you a place to start.
The next option, as you may have guessed, is to get a bank loan. And if you have saved up a sizable down payment and/or you already own the land needed to get your project underway, you should be able to secure the lending you need to complete your dream home. Of course, you also need a steady income. And you may have to provide plans for construction, including the estimated costs involved, if you want to get loan approval. In truth, building a home, especially in an economy that is still recovering from recession, could be a relatively affordable option. And new construction represents a good investment for lenders, supposing it is completed within the set budget. So you might be able to secure the funding you need if you get all your ducks in a row.
And there are other options, as well, although most have serious drawbacks. You could tap into a retirement fund, for example. A 401K or a regular IRA will cost you in penalties, but if you have some money saved in a Roth IRA, you can withdraw the principle at no penalty. In fact, you won’t even have to pay income tax on the money since you’ve already been taxed on everything you contributed to a Roth IRA. You could also sell stock. It’s not hard to find a website that can offer you a variety of suggestions for getting the funding you need to build your dream home. But you want to make sure that you secure your funds in the most beneficial and risk-free manner. And leveraging your current property and getting a bank loan are probably your best bets.
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