You May Not Have to Sell Your Home to Build Your Dream Home
The unique financing option offered by our partners, the McDonough Team at Mid America Mortgage.
When potential homebuyers learn about how we make designing and building their dream home possible, one of the first questions they have is: “great, how do I finance it?” We believe that part of making building a home more accessible includes tackling financing, so when we met Kyle McDonough at Mid America Mortgage and he understood the problems current homeowners face we were excited to work with him and his team. Check out these (custom!) loan products that allow folks to buy land faster and leverage the equity in their current home so folks have an easier time building their dream home.
Expedited Timeline and Additional Options
Currently, building a custom home isn’t as popular as buying an existing home, so there aren’t many products or competition to make it easier for folks. This has made the loan process onerous and financially infeasible for many people. Seeing this difficult situation for homebuyers, the McDonough Team came up with a solution to address common pain points like difficult pre-approvals and lofty down payment requirements. Their Land2Build program allows buyers to purchase land with less money down, followed by a standard construction process and a normal construction loan close.
The key to Land2Build is that buyers have to be ready to build because this is not a land loan. Instead, buyers need to have details nailed down with a builder such as Atmos in order to be pre-approved for a Land2Build loan. This way, the lender and the entire team can gather an idea of expected costs and timelines.
It allows you to buy land quicker and not have to wait for the entire construction loan process. Right now you either have to buy it with cash or with a construction loan that takes 60 to 90 days, which is inconvenient and time consuming.
Leveraging the Equity in the Buyer’s Current Home
Financing a home for current homeowners can be especially difficult because their biggest form of equity is their home. This means most people have to sell their home in order to free up that equity, which may leave them renting an apartment during the construction of their new home or they must have enough cash to go towards their down payment. This can result in a much longer timeline and thousands of dollars in financial loss while they wait for their dream home to be built.
To address this common problem, The McDonough Team offers 2CP, a two-time construction loan that takes the buyer’s current home equity into account in their loan approval process, while at the same time not counting their mortgage payments against them in calculating their debt-to-income ratio. The first closing will take their current home’s equity into account, and they won’t need to bring money down from that equity until the second closing. This eliminates the unpleasant and costly necessity of buyers renting a home so that they can bring their equity to the first close. This also opens the door for more qualified buyers because home equity has seen such a spike in the last few years, and CP2 allows buyers to access that much more easily.
Working with the McDonough Team
In a competitive market like Charlotte or Raleigh, time is of the essence. The McDonough Team expedites the pre-approval process to get back to buyers within a few short hours. This way, clients are much less likely to miss out on a land purchase opportunity in a multiple-offer situation.
Construction loans can be confusing, so the McDonough Team strives to be available and work around client schedules in order to answer questions and thoroughly educate each client, every step of the way. With an easy draw process and easy builder approval process, the McDonough Team accommodates builders and expedites each milestone.
If your heart is set on building custom but you’re stuck on the financing step, there may be a better solution available. Leverage the equity in your current home and expedite the construction loan process with the McDonough Team and Atmos. Get started building your dream home today!
