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For many homeowners hoping to remodel their kitchens or add square footage, borrowing against their home equity is a logical way to finance such a project.
That, or winning the lottery.
But for some homeowners, a construction loan is another option.
In decades past, construction loans were generally for homeowners who were building new homes on land they already owned outright. The loan covered only the construction process, and the homeowner typically had to seek out a long-term mortgage once construction was finished.
Find out more about the new ways of funding remodels…
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You're getting into risky territory when you start investing borrowed money. At first glance, your plan may seem like an easy way to use the bank's money to easily rack up investment gains for yourself.
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Based on 25 years of home-building experience for 30,000 people, here are the 10 biggest mistakes in home buying:
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3. Choosing a poor location. Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window?
Read about other home buying mistakes…
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