Mortgage Process For Buying New Construction Homes
In this blog, we will be covering and going over the mortgage process for buying new construction homes. Buying new construction homes is becoming increasingly popular among homebuyers. Most first-time homebuyers opt buying new construction homes versus existing homes. Many first-time homebuyers have a choice of either buying a new construction home or an already built home. With Buying New Construction Homes, everything is brand new. The appliances were never used before. The paint, flooring, bathrooms, bedrooms, and kitchen are all brand new. However, there are negatives when buying new construction homes. One of the biggest negatives is the landscaping. All the shrubs and trees will take time to mature. Depending on the area, the whole neighborhood may be a brand new subdivision where it may look barren due to no mature trees. In the following paragraphs, we will explain the step by step mortgage process for buying new construction homes.
Is It Better To Buy a Newly Built Home or an Older House?
Homebuilders have been very busy the past several years. Despite the coronavirus pandemic, homebuilders have more demand for housing than inventory. Home prices keep on going up. This is mainly due to land value. Homebuilders are scooping up any buildable land to build homes due to the heavy demand. Record earnings have been enjoyed by home builders year after year. Many homebuyers prefer becoming homeowners sooner by buying an already built older home. Depending on the new construction development, it may take anywhere between six months to one year or even longer to take occupancy on a new construction home.
Why A New Home Is Better Than an Existing Home?
One of the greatest benefits of buying new construction homes is everything is new. Nobody took prior occupancy. Homeowners can customize the new build with the choice of paint, colors, millwork, tile, countertops, appliances, and other amenities. Homebuyers shopping for a home should weigh the benefits versus the negatives of buying new construction homes versus older already built homes.
Buying a Fixer Upper Home
A great benefit of buying a new construction home is the ability to customize your home. Homebuyers can participate in the home-building process. They can customize the home build to their tastes and liking. Whether it is the choice of carpeting, tiles, cabinets, appliances, or other choices of materials, new construction homebuyers have a say on the specs of the new home build.
Renovations To Old Home Take Time
No renovation after moving in is a great benefit of buying a new construction home. One of the major disadvantages of a new construction home is the time it takes to complete. It takes anywhere between six months to one year to build a new home from start to finish. There are instances where a new home may take longer than 12 months.
Is It Better To Buy A New Or Existing Home?
New homes cost more than older homes. A brand new construction home has an average price of $306,102. The average price of an already built older home is priced at $227,000. However, a new construction homeowner does not have to worry about maintenance for many years. A homeowner buying an older home may have more maintenance issues such as appliance breakdown, roofing leaks, HVAC repairs, and other high-ticket item repair needs. With new homes, homeowners do not have to renovate the property after they move in. The home will be in move-in condition with everything brand new with that new house smell.
Mortgage Process On Buying New Construction Homes
Many new home buyers are curious about how the mortgage process on new construction homes works. There is not much difference in getting a mortgage pre-approval with new construction versus older homes. However, the mortgage rates are not locked until a later date. Mortgage rates are locked around 60 days prior to the home being occupancy ready. The home building process is different for every builder. There is no set standard new construction home building process. The down payment to secure and start building is different depending on the home builder. There are also various different types of financing for new construction homes. Gustan Cho Associates offers a one-time construction mortgage loan on FHA and VA loans. Gustan Cho Associates also offers new construction loans on manufactured homes. These days, many manufactured homes are built like regular homes. They look very nice, are very sturdy, and are priced well below stick-built homes.
Financing New Construction Homes
Gustan Cho Associates now offers a one-time close new construction mortgage loan on FHA and VA loans. Gustan Cho Associates has a special one-time construction mortgage loan program for manufactured homes. These are very popular loan programs. The one-time construction loan program was temporarily halted due to the coronavirus pandemic. However, we have reopened our one-time construction mortgage loan programs. As always, our FHA 203k loan program is very popular. FHA 203k loans are renovation loan programs with a one-time close. There are two different types of FHA 203k Renovation Loans: Streamline and the Full Standard FHA 203k Mortgage Loan. There is no construction budget for the Full Standard FHA 203k Mortgage Loan. You can go as high as the FHA loan limit in your county. You can do a complete gut rehab with a full standard 203k loan. The FHA 203k Streamline Renovation loan is capped at $35,000.
For more information about our renovation and one-time construction loan programs, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.
This blog on buying new construction homes was updated on August 1st, 2022
