http://www.homeequityinformation.com/home-loans/home-construction-loans/ Home construction loans are a great way to turn that house into an actual home. But you have to be able to afford these home construction loans - you can't just rely on your equity increase. en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 An important rule to remember about your home: its only worth what the buyer is willing to pay for it. Just because you have $200,000 in equity on paper doesn't mean you are guaranteed that much on your sale. If you are thinking about home construction loans to reinvest in your home itself just remember that you are responsible for the costs - you cannot shove this one off on home equity. Making home construction loans work Your home will appreciate in one of two ways: over time through an increase in national or area-specific housing costs ( as seen in today's market) through the hard work you put into any home improvements that will increase the value of your home in its own right. Home construction loans are therefore a great way to build upon the investment of a lifetime, and when you honestly assume your upcoming financial obligations beforehand you will come out ahead. The most important quality you need to look at in home improvement loans is your debt to income ratio. How comfortable are you now in paying off your current home loans, and can you handle the additional weight of another loan at a conceivably higher rate? Consolidating your loans through future refinancing is a possibility - but you should never plan on it. If you can afford it, do it - home improvements bring a lot of money in for the investor. Home construction loans for building the actual home itself If you are thinking about building a new home from scratch - well, thats a different type of home construction loans entirely! YOu think there is sweat equity to be gained through home improvements? Wait till you try home building! For putting $100,000 into raw materials and labor you can bank on at least a $300,000 home - but that doesn't come without a whole series of catches you need to be aware of: The first thing first time home builders become aware of is that there is always an additional expense. You don't want to take the cheap way out, but the right way usually costs a whole lot more. Even if your hire a contractor you can never be sure of a set finished date - delays are inevitable. You need to have patience and a willingness to spend AND take risk in order to make home construction loans work to your financial benefit. Sat, 26 Jul 2008 15:00:00 EDT