Calculate your new construction loan or refinance options below. Input your details and hit Calculate to view your loan terms and an interactive graph. Additionally, explore the detailed payment schedule in the table below, and download the data as an Excel or CSV file for your records.
Step 1: Select your loan type (Purchase or Refinance) Step 2: Enter the cost of land and construction Step 3: Provide loan and mortgage details Step 4: Calculate your results
The online construction loan calculator provided by busybusy is a tool designed for informational purposes only. While we strive to ensure accuracy, we do not guarantee the reliability or suitability of the results for any specific purpose. Users are solely responsible for the interpretation and application of the calculated information. busybusy disclaims any liability for actions taken or decisions made based on the results obtained from the calculator. It is recommended to consult with a qualified professional for precise construction calculations and decisions. By using this calculator, you acknowledge and accept these terms.
Getting a building loan to construct your dream home can seem complicated. How much will it cost? What will your payments be? Luckily, building loan mortgage calculators make estimating your construction financing quick and easy. Whether you’re building from the ground up or renovating an existing structure, these online tools can provide key insights into the financial feasibility of your project.
In this article, we’ll demystify building loan mortgage calculators You’ll learn what they are, how they work, and how to use them to plan your construction loan. Let’s get started!
What is a Building Loan Mortgage Calculator?
A building loan mortgage calculator is an online tool that allows you to estimate the costs and payments associated with obtaining construction financing, Here are some key things the calculator helps determine
- Estimated construction loan amount required
- Monthly interest-only payments during the building phase
- Projected mortgage payment once construction is complete
- Total interest paid over the life of the loan
The calculator takes into account factors like land purchase price estimated build costs down payment amount, length of the build, and more. It then crunches the numbers to give you an idea of the financing needed and the monthly cash outlay.
Building loan calculators come in handy when determining if your construction project is financially feasible. They allow you to tweak the inputs and variables to find a loan structure that fits your budget.
How Do Building Loan Mortgage Calculators Work?
Building loan calculators use your inputs to approximate construction costs, loan amounts, and payments. Here’s a look at how they make their estimates:
Loan Amount
The calculator first totals the land purchase price and estimated build costs. It then subtracts your down payment to determine the required loan amount.
For example, if the land costs $100,000, construction costs are $300,000, and your down payment is $50,000, the estimated loan amount would be $350,000.
Interest-Only Payments
During the construction phase, your monthly payments only cover the interest accruing on the loan. The calculator estimates this using the loan amount and the inputted interest rate.
For the $350,000 loan above at a 5% rate, the monthly interest-only payment would be around $1,458.
Mortgage Payments
Once construction is complete, the calculator assumes you will refinance into a traditional mortgage. It uses the final loan balance, mortgage rate, and term to estimate your post-construction monthly payment.
If you obtained a 30-year mortgage at 4% for the remaining $350,000 balance, the monthly payment would be approximately $1,665.
By calculating these figures, the building loan calculator gives you an idea of the cash flow needed to take on your project.
How to Use a Building Loan Mortgage Calculator
Using a building loan calculator is straightforward. Just follow these steps:
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Find a calculator: Search online for “building loan calculator” or “construction loan calculator” to find options.
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Input costs: Enter your estimated land purchase price and total construction costs.
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Enter loan terms: Specify your anticipated down payment, interest rates, loan term, and construction duration.
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Review estimates: The calculator will provide estimated loan amounts, interest-only payments, and post-construction mortgage payments.
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Tweak inputs: Change the inputs to model different down payments, rates, or construction costs until you find numbers that fit your budget.
Be sure to use realistic estimates for the most accurate projections. Consulting with builders and real estate agents can help provide reasonable cost and timing estimates.
Key Inputs for an Accurate Estimate
To get the most precise estimate from a building loan calculator, pay close attention to these key inputs:
Land Purchase Price: Research sale prices for comparable lots in your desired area. This greatly impacts your total costs.
Construction Costs: Get quotes from contractors to estimate pricing for materials, labor, permitting, etc. Costs vary based on home size and quality of finishes.
Down Payment: Lenders usually require 10-20% down for construction loans. A higher down payment will lower your interest costs.
Interest Rates: Compare current rate offers from lenders. Construction loan rates are often 1-2% higher than mortgage rates.
Loan Term: Most construction loans convert to a 15 or 30-year mortgage. Shorter terms have higher monthly payments.
Build Duration: Experienced contractors can provide estimates on how long construction will take. Typical timeframes are 6-12 months.
With realistic inputs, the building loan calculator can provide actionable estimates to aid your construction planning.
Benefits of Using a Building Loan Mortgage Calculator
Building loan calculators provide many advantages when planning construction financing:
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Estimate costs: Calculate estimated construction loan amounts needed.
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Model payments: Project monthly interest-only and mortgage payments.
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Assess feasibility: See if project fits within your budget constraints.
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Compare options: Test different down payments, rates, terms to find optimal financing.
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Plan & budget: Use estimates to create project budgets and cash flow plans.
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Educate yourself: Learn how construction loans and payments work.
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Prepare documentation: Use printed estimates to submit for loan applications.
Frequently Asked Questions
How accurate are building loan mortgage calculators?
The accuracy of the estimates depends on how realistic your inputs are. By using researched cost estimates and current rate offers, the projections can be quite accurate. The calculators give you a very good ballpark figure for planning.
Are there fees to use building loan calculators?
Most construction loan calculators available online are completely free to use. You simply input your numbers to get an instant estimate.
Can I save or print the estimates for my records?
Yes, most calculators allow you to download or print the detailed estimate for documentation purposes. This can be useful for submitting to lenders or tracking project budgets.
Should I shop around mortgage rates before using the calculator?
It’s a good idea to compare mortgage and construction loan rate offers from lenders before using the calculator. This allows you to input current rates for the most accurate estimates.
How often should I adjust the calculator as the project progresses?
Revisit the calculator regularly throughout your project as costs and other factors change. Update the inputs often to keep your estimates and cash flow projections on track.
Start Planning Your Dream Home
Building your own home can be immensely rewarding, but it requires careful financial planning. Be sure to leverage building loan mortgage calculators to estimate costs, payments, and feasibility. These online tools provide invaluable insights to kickstart your construction loan planning.
With realistic inputs and some prudent budgeting, you’ll be on your way to turning your home construction dreams into reality. The building process starts with gaining the key financial insights these calculators provide. Go ahead and crunch the numbers to start your exciting journey today!
Advantages of a Construction Loan Calculator for Construction Companies
Construction companies can swiftly estimate the cost of new construction loans or refinancing options. This tool enables precise budgeting, helping companies ensure they are financially prepared for their construction projects.
With this calculator, you can gain insights into your loan terms and monthly payments. It empowers you to make informed financial decisions and optimize your project’s budget, potentially saving costs in the long run.
Construction Loan Calculator Definitions
Refinance: The process of replacing an existing construction loan with a new one, often to secure more favorable terms or to convert the loan into a permanent mortgage.
Remaining balance: The amount of the construction loan or mortgage that is still unpaid, which decreases as you make payments.
Cost of construction: The total expense associated with building or renovating a property, including materials, labor, and other project-related costs.
Down payment: The initial payment made by the borrower when obtaining a construction loan or mortgage, usually a percentage of the total project cost.
Loan interest rate: The percentage at which the borrowed money accrues interest, impacting the overall cost of the construction loan or mortgage.
Length of project: The estimated duration for completing the construction or renovation project, which can influence the loan terms and interest rates.
Mortgage: A long-term loan used to finance the purchase or refinancing of a property, typically repaid in monthly installments.
Mortgage rate: The interest rate applied to a mortgage loan, influencing the monthly payments and overall cost.
Mortgage term: The predetermined time the borrower will repay the mortgage, such as 15, 20, or 30 years.
Monthly mortgage payment: The regular, usually monthly, installment paid by the borrower to cover the mortgage’s principal and interest.
First interest-only payment: The initial mortgage payment in which only interest is paid, without reducing the principal balance, standard in construction loans during the project’s development phase.
Initial construction loan: The loan obtained to finance the construction or renovation of a property before converting it into a permanent mortgage.
Last interest-only payment: The final interest-only payment made on a construction loan before transitioning to a traditional mortgage payment structure.
Initial mortgage balance: The outstanding loan amount at the beginning of the mortgage term, usually equal to the original loan amount.
Construction loan amortization: The process of gradually paying off the construction loan by making regular payments, which include both principal and interest, until the loan is fully repaid.
Did you see “Download Excel” or “Download CSV”? If you would like a more detailed report hit “Download Excel” or “Download CSV” to get a detailed report in a spreadsheet format.