How to Build A Home with a Single Construction Loan on the Jersey Shore NJ !!!

Mortgage and Lending with TD Bank 466521

How to Build A Home with a Single Construction Loan on the Jersey Shore NJ !!

Jersey shore 4

The tides are definitely changing. The appeal of construction mortgages are on the rise, as they give homeowners the perks of building their dream home with a single mortgage. With a construction loan, home owners can not only add luxurious amenities like swimming pools but also transform their properties onto stunning vacation homes. Major renovations such as adding an extra room or upgrading with an extension is also possible through a decent construction loan.

So What Exactly is a Construction Loan?

Construction loans are short term financing options that can cover the building costs while the construction in the home is in progress. The demand for these loans is steadily increasing, particularly because of the lack of inventory in most markets. Instead of choosing from the limited number of choices, a lot of people go for the more viable option of building their home and enhancing its value.

Why is the Demand for Construction Loans Rising? 

Mostly when home owners need to expand their property or build their own home, they go for contractors who have their own financing to carry on the construction. At the end of the job, the homeowners can opt for a standard home mortgage. But it often happens that these specialty contractors don’t have front end financing of their own. In these cases, going for a construction loan is the only choice available. 

Jersey Shore 5Types of Construction Loans

There are different types and variants of construction loans, but the most popular of these is the construction-to-permanent loan. This loan covers all the building costs and then converts into a normal mortgage loan after the construction is completed.

The main advantage of this kind of loan is that it has one application and one closing, and it acts like a line of credit during the entire construction phase. It provides the borrowers with the cash inflow that they need, and only the interest amount needs to be paid during the construction period. Once that is finished, the borrower can proceed with the interest as well as principal payment.

However, despite all the advantages there are a few setbacks that make these loans a little difficult to handle. Some of these issues include:

Getting an AppraisalJersey Shore 3

Construction loans are usually approved after an appraisal by the lender. This can prove to be a disadvantage if other h

omes in the market are of a lower value, because the lender will then approve a lower value loan. To overcome the issues, borrowers have to make larger down payments which can sometimes be unaffordable. 

Higher Interest Rates

Most lenders offer construction loans with adjustable rates only. This means that the payment amount can increase in the future as the Federal Reserve resets the interest values. A lot of lenders also charge a higher interest rate for these kinds of loans, which are around a quarter of a percentage point higher as compared to private mortgage loans. 

Hidden Charges

Aside from the interest rate and down payment, beware of the extra fees and costs that will come with the loan! While origination fee is often charged as 1% of the total loan amount, some lenders may also charge a penalty if you pay off the loan early or go for a refinance.  

For help with Construction loans- how to build a home with a single construction loan contact Tony Busanich a loan officer with TD Bank, a portfolio lender from Maine to Florida. You can trust TD Bank to deliver a superior mortgage experience. Whether you’re purchasing or refinancing, we provide straightforward, easy-to-understand products and advice, allowing you to make smart borrowing decisions that meet your needs today and tomorrow. My web site at includes mortgage rates updated every morning. You can run different scenario that  include monthly payments, different programs and closing cost. Please contact me at 732-306-2231 or by email at and on my web site at

Comments (12)

Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good information for those that may be considering construction loans. 

Dec 19, 2013 01:01 AM
Tony Busanich
TD Bank - Freehold, NJ

Roy, thanks for commenting on my post.

Dec 19, 2013 01:04 AM
Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate

Great information - and there certainly is plenty of new construction going on at the Jersey Shore this year!

Dec 19, 2013 05:04 AM
Tony Busanich
TD Bank - Freehold, NJ

Wayne & Jean, we're so busy with construction loan in South Jersey that 40% of the business is people looking to do construction loan. Thanks for commenting on my post.

Dec 19, 2013 06:53 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Great advise on construction loans and building in South Jersey!

Dec 19, 2013 07:55 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Excellent information for those that wish to build a custom dream home to their specs

Dec 19, 2013 08:46 PM
Tony Busanich
TD Bank - Freehold, NJ

Renee- thank you for commenting on my post.

Gabe- also many thanks

Dec 19, 2013 11:00 PM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Tony, Buyers don't always understand the difference between construction loans and permanent loans. Having a lender that can explain and guide is a very important step in relieving some of the stress of the building process.

Dec 19, 2013 11:05 PM
Tony Busanich
TD Bank - Freehold, NJ

Debbie, yes a construction loan can be  a totally different process when is comes to financing a property, we offer great rates and our program and service guide you thought the process with no surprises.

Dec 19, 2013 11:18 PM
Brilliant! This is a really marvelous stuff for me. Must agree that you are one of the coolest blogger. I was curious to see a stuff like that. Fabulous post! Scratch Remover
Jan 27, 2014 11:30 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Tony, this post is very important, maybe you should repost it soon.  I think many would benefit.

Dec 11, 2020 07:17 AM
Tony Busanich
TD Bank - Freehold, NJ

Thank you Joan,  I agree i'm going to repost this again. Wish you all the best.

Dec 11, 2020 10:56 AM