Owning the home of your dreams always comes at a price. And whether you're just starting out or you're building your retirement cottage by the lake, chances are someone other than you will have to help finance the cost of building your dream.

Now, if you've been through the home building process before, you know that construction financing isn't the same as taking out a conventional mortgage on an existing home. But if you haven't had the pleasure of having a castle built just for you, there are a few things you should know about new home construction loan financing. For instance:

• Getting approved for construction loan financing can be tricky. Two loans are often required - one for the construction period and one for permanent financing. Which means you'll have to shop for both loans separately and will likely incur closing costs for both. However, if you qualify for a loan with a company that offers Construction-to-Permanent loans, both loans will be rolled into one - and take the extra steps out of getting your dream home financed.
• Bridge Loans can help secure your new owner-occupied primary residence home loan before you sell your current home. If you already own a home, a Bridge Loan will allow you to tap into the equity in your existing owner-occupied residence and use it as a down payment on a Construction-to-Permanent loan. When you sell your current primary residence or your new home is finished, you will simply pay off the Bridge Loan and make payments on your new home construction loan financing (a.k.a. - your mortgage).
• If you've found the right location - but aren't ready to build your dream home - you can buy only the land and build on it later. Simply find a lender that makes Lot Loans, which is short-term financing that will give you time to choose an architect and builder to give you your perfect escape. Of course, many lenders are cautious about lending money on land, because it can be difficult to resell if the buyer defaults on the loan, so many request a large down payment with a high interest rate. So shop around for the best possible loan and save your money for the down payment on your construction loan financing.

Going through the process and doing your research will certainly yield additional information from experts in the field. But if you know what types of loans to look for - and what they'll mean for you as your new home is being built - making the right decision for you and your financial situation will be a lot easier.

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Karen Crane is a mortgage broker who has learned about the world of custom home plans the hard way. Having gone through the process of building three homes, she has finally settled into her dream house. Find the perfect plan for your family - and information on Owner Builder home construction financing loans at http://www.ownerbuildersolutions.com.