When it comes to new construction homes, financing is often one of the most important considerations for you as a buyer. The kind of loan you can get often dictates the kinds of new homes you can search for and the range of prices you’re able to consider.
At Rodrock Homes, we understand how important it is for you to save money during this process. In this two-part blog, we’ll discuss several important areas you should consider as you look for the proper financing for your new home.
Builder Considerations
Finding a great builder is important for a number of reasons, and financing is one of them. Lenders absolutely check into the track record of a homebuilder before approving a new construction loan, meaning you’re best choosing one like ours – with years of experience and a good reputation in the community.
Perform a detailed interview, including questions about licensing and compensation insurance. Make sure partnerships with local contracts are solid. View references from past projects and even contact these references if appropriate.
Organize Finances
Qualifying for a good loan requires a bit of paperwork. Construction loans are different from traditional loans in that lenders are loaning money toward a home that doesn’t exist yet, rather than an existing home – this means your credit history and building plans are important factors in whether you’ll be approved. Speak to a lender about pre-approval, which won’t guarantee you funding but often is a great help. Understand down payment requirements and be prepared with all relevant financial statements.
Land Purchase
Even before you go to a lender with your application, you should have things like a building plan, a builder contract and a budget secured. At Rodrock Homes, we build in a wide variety of communities that can meet your lot needs.
Plans and Budget
Once you have land decided, work with our design team to draft plans and create a solid planning budget. Consider the orientation of the home, various utility connections, distance to bordering properties and other factors. From here, your builder can help you lay out a budget.
Local Lenders
Once you’ve done all of the above, you’re ready to present a loan application to a lender. Our local professionals can recommend local lenders – we generally advise our clients in this direction first. Local lenders have a better understanding of the nearby market, and we have relationships with several. Your chances of approval go up when you work with these kinds of lenders.
Next time, we’ll go over the process of applying and securing a construction loan. For more on this, or to view any of our homes for sale, speak to the pros at Rodrock Homes today.
