As you build a new home on your land, determining if you need financing is a major step in the journey. We’ll walk you through your options for financing to build on your lot, including construction loans and other financing programs, so that you can choose the best path for your budget and goals. 

Common Financing Options for Landowners 

Some homeowners pay cash when building on their lot, bypassing loans and interest altogether. For those who choose to finance a home, there are several options, including: 

• Construction loans: These are short-term, higher-interest loans used to finance a new construction build. The funds are paid out in intervals as construction progresses, and the loan often converts into a permanent mortgage after completion. 
• Traditional mortgages: After construction, you can roll the balance into a standard long-term mortgage for ongoing financing. This is a long-term loan, with fixed or adjustable interest rates and regular monthly payments over a set period. 
• Land equity loans: A land equity loan allows a landowner to borrow money using the equity built up in the land, which can reduce upfront costs. 
• Home equity line of credit (HELOC): A HELOC allows homeowners to tap into the equity from another property, providing a flexible line of credit that can be used to fund construction costs. Interest is only charged on the amount you draw (similar to a credit card).  

How Construction Loans Work in North and South Carolina 

When building on your lot, construction loans are the most popular option. Once construction is finished, these loans can typically be converted into a traditional loan to finish the payments. 

Here are some consideration points when building in North or South Carolina: 

• State-specific lender programs: Credit unions and local banks often offer construction loans tailored to North and South Carolina landowners. 
• Permit and zoning considerations: Lenders will review local permits, inspections, and site plans before approving funds. 
• Regional construction costs: Materials, labor, and utility hookups in North and South Carolina can influence the loan amount and disbursement schedules. 

Understanding the general process and region-specific requirements when financing your home can help you move forward smoothly in the home building process. If you have any questions about financing, contact our team today to discuss your options. 

Steps to Secure Financing to Build on Your Lot 

Step 1: Assess Your Budget and Costs

Estimate the total construction costs (including land preparation, foundation, building materials, and upgrades) to determine how much financing you’ll need. 

Step 2: Explore Financing Options 

Compare construction loans, traditional mortgages, land equity loans, and HELOCs to find the best fit for your situation. 

Step 3: Apply and Prepare Documentation 

Gather the appropriate documents to apply for your chosen loan and secure financing. 

FAQs

How can I finance building a home on my own land in North or South Carolina?

You can finance building on your lot through various options, such as a construction loan, traditional mortgage, land equity loan, or a home equity line of credit (HELOC). Construction loans are the most common choice, covering the cost of building and typically converging into a traditional loan once construction is complete. 

Can I use a loan if I already own the land?

Yes. If you own your land, you can finance your home using construction loans, HELOCs, or land equity loans. Using a land equity loan, your land can sometimes be used as equity to reduce upfront costs. 

Are there affordable financing options for building on my lot?

Yes. Many lenders in North and South Carolina offer competitive construction loan rates, specialized programs for landowners, and flexible financing options and loans to help make building on your land more affordable.