How to Buy a New Construction Home
New construction homes are not just for the mega rich. While the idea of buying a plot of land, hiring an architect and construction company, can be seen as an overwhelming endeavor, there are alternative options for those who want to be the first to live in their new home. Affordable turnkey new homes, ideal for first home buyers and growing families, are going up in desirable neighborhoods throughout the country.
Getting a new construction loan to build on your own lot
A newly constructed home requires several physical inspections and appraisals during the construction process so it makes sense to have the financing handled by a local mortgage company who understands the local market.
Getting a home construction loan will require that you first buy a piece of land, then choose an architect to design your home. Next, you will have to be approved for the actual construction mortgage. During the construction you will be asked to make monthly payments on the amount of money that has been used during construction. After your home construction is complete and approved by the inspectors and mortgage lender, your construction loan will be converted to a mortgage loan and you will have one payment for the remainder of the home loan.
Getting a loan for a recently constructed turnkey home
If you want to be able to move in to your new home quickly, but still have the option to personalize your home, look for a home in a new housing development or condominium building. They often offer a few floor plans and design options, and the opportunity to customize or upgrade features such as kitchen cabinets, granite counter tops, tile or wood flooring, finished basements.
In this instance you would look for a turnkey loan where financing for construction is approved for the home builder, who makes all payments during the construction phase. The borrower is only required get approved for a conventional loan, FHA or VA loan and make the initial down payment. Even if it takes a couple of months for the home to be completed, the borrower is not required to make payments until the home is ready to move-in.
End of year builder incentives on a turnkey home
If you’re buying a turnkey house direct from the builder, you may be able to negotiate a better deal towards the end of the year. Many builders want to close the books on their year and are often prepared to negotiate to meet sales quotas. While builders are reluctant to reduce the price as it sets a precedent for future price negotiations, builders are more likely to negotiate upgrades or extras, such as hardwood floors, granite counter-tops, to sell their houses.
Qualifying for a new home loan
Starkey Mortgage has loan officers in 13 states who can qualify you for a new construction home loan or a mortgage on a turnkey property. Find a loan officer in your region who will work with you and you’re your builder throughout the entire process.