“This is one of the most important things you can do,” says Kevin Ragan, the head of construction estimating at the Boston Consulting Group.
“If you’re going to put down $100,000 on a project, you need to know how much money it will cost to complete.”
The first thing you’ll need to figure out is the type of project you’re interested in.
A typical house for example, would be a big, modern apartment building, and you’d want to know if it will need to be built with concrete, glass, steel, or even brick.
A smaller project might be a one-story garage with a garage door that’s only partially open.
Once you’ve figured out which type of house you want to buy, you’ll want to find out how much you can borrow.
“When you go to your local bank and look at the interest rates, it will tell you how much it will charge for the first three years, and then after that it will start to decrease,” Ragan says.
If you’re making $50,000 a year, and can afford the interest rate, you can take out a $5,000 loan.
If the interest isn’t enough to pay off your mortgage, you could borrow $3,000, which would leave you with a $20,000 hole to dig out.
You’ll also want to figure in how much of your income you’ll be able to afford.
The more money you have to put aside, the less you’ll have to worry about paying down your mortgage.
For example, if you’re living in a studio apartment with two bedrooms, you may be able’t afford to live there all the time.
So instead, you’d need to invest in a larger house with more bedrooms.
Ragan’s company’s data shows that if you can’t afford the monthly payments, you’re better off looking elsewhere.
“In a couple years you’ll start to realize you can get by on $50 a week,” he says.
“That’s a lot of money for a family of three.”
With a $50 million loan, Ragan estimates the home would cost you about $40,000 to remodel.
With a slightly smaller loan, you should be able afford to remodels for about $1 million.
“A $50-million loan is the easiest way to make money in your life,” Raga says.
In addition to the monthly interest, the cost of the construction costs could also factor into your decision.
A construction loan can be financed with cash, an installment loan, or credit cards, depending on your credit score.
A $50 loan can get you into the red in a few years.
“It’s not necessarily that the interest will be as high,” Ragon says.
Instead, you might be able get a better rate by having a larger down payment, and a lower monthly payment, which means you can pay off the loan faster.
“You can save a lot on the down payment by having less money upfront, which you can then spend on the house,” Ragin says.
What to do if you do decide to go for a construction loan Image The most important thing you can tell lenders about is the amount of money you’ll pay back on the loan.
The higher the downpayment, the lower the interest you’ll get, Ragon explains.
“So if you have a $10,000 down payment on a $60,000 mortgage, then the interest is going to be $10 less than if you had a $3 million down payment,” he explains.
It’s important to know the total down payment for the house you’re buying, too, so you know what the monthly payment will be.
“With a $100 million downpayment on a two-bedroom house, that means the interest on the principal and interest on all the remaining principal will be $100,” Ragg says.
You should also look at whether you’ll qualify for the refinancing program.
You could have your interest rate cut in half by refinancing your home, but that could cost you $20 or $30,000 over your life.
If your down payment is $20 a month or more, you don’t have to pay any fees, and the interest can be waived.
If it’s $10 a month, you do have to contribute $20 to the refinanced loan.
“There’s no down payment requirement, and it’s not tied to your credit,” Ragans says.
So if you are interested in getting a construction financing loan, make sure to get a good understanding of how the rates work.
“Most construction loan terms aren’t that complicated, but there are some things to keep in mind,” Rahan says.
For instance, the rate of interest on construction loans is lower than the rate on other kinds of mortgages, so it’s important not to make the loan with too much money down and to make sure you’re getting a