Buying a new construction home questions?

Question

I found a neighborhood that I like and in the price range I can afford. They are building homes in it still and I would like one. They have several options to pick from and styles. How does it typically work? Do I pick a lot and pick the type of home I want built and the lot and they start building? When do I start paying for it? I guess what I am asking is when I go talk to the builder and tell him what I want, what do I have to do to prove I can buy the home when it is done? Do I start paying for it before it is done? and most mortgage locks are only 60 days and I doubt they can build it in that time. Any help would be greatly appreciated.

Answer 1

OK, consider this...

First you pick the lot location. Then select the model of home you want to build with the square footage that you can build. Then select the Elevation that you desire. The Elevation is the front facade, whether it be vinyl, brick, stone, or a combination therein.

Then you start selecting your interior finishes, but be careful as they can really start to add up!

Once all selections have been made, your "order" goes thru their design/engineering department and plans are then drawn up. From that point, there is a bit of time until the foundation is started to be dug.

Typically, you get what is called an "end loan". This type of loan will be in place at the time you close. All the while, the builder will have his own construction loan. This is the easiest and best scenario for the Home Buyer, as you don't have to keep going to the bank for your construction loan where monies are giving on intervals throughout the construction process.

Make sure you go to a reputable Lender NOW, and get Pre-Approved for your loan that you want. Make sure the Lender gives you a Pre-Approval and NOT a Pre-Qualification. You don't want any surprises when you go to close on the purchase to take possession! Be sure to tell the Lender that the home will be built around , so they get you whatever lock they can.

If I can answer anthing additional, email me!!

Good luck!

Answer 2

First step is to get an outside real estate agent to represent you. Don't worry about paying him/her. The commission will be paid by the seller/builder. Your agent will be present when you talk to the builder/seller and could explain any real estate terminology you need further explanation. Ask your agent to get a brochure from the builder to include the map of the community, the plans and type of houses to be built, price list, and other info about the community. All of these should be just in one package. Take and study it at home. When you finally made your decision, call your agent and both of you will go back to the builder. Paperworks will be signed, security deposits will be asked, etc. Now the tricky part. On the papers you will be asked to sign will be a contingency that the builder will give you so much $$$ for the closing cost as assistance, will provide such option and others IF YOU WILL USED THE BUILDER'S MORTGAGE COMPANY, TITLE AND INSURANCE COMPANY. This is okey if the interest rate that the mortgage company offer's is better than the prevailing rate. Most of the time it's higher. Tell your agent to add also a contingency that if the mortgage rate of the builder's mortgage company is higher than the market, that you can used other mortgage company with the closing assistance, options and others still intact. If the builder balked, walk away. Also, search the net about junk fees that builder's lender always add which are in the thousands. Don't accept these junk fees. The only amount you need to put down is the security deposit, which you need to tell your agent to add another contingency that if you are not satisfied with the builder's lender your deposit be returned without further delay. Beware also of the options that the builder will offer. This is where they can also get more profits. Refuse to pay premium lot. It's the amount the builder's agent on the premises add for his salary. In addition, your builder should keep you updated on the progress of the building once a week or every two weeks. When it's almost done, HIRE an independent HOME INSPECTOR (about $200.00) who will inspect the house for things that a common homeowner has no experienced what to look for in the construction, i.e. foundation, leakage, roof, and lots more. It's better to find out the discrepancies on this stage instead of when you already moved into the house. When this happen, you are already on the bottom of the pole for the builder to take care. You start paying the mortgage payment, if everything goes smoothly, one month after closing. Closing cost is estimated at 5% of the sales price plus the cost of the options.

Answer 3

My suggestion is to get approved first. Then you go to the builder knowing what you can afford. You pick the house you like the best and then they will tell you what lots are left that that house will fit on. Example: Most builders will not allow 2 identical models next to each other, or perhaps you wanted an english basement which means you need a sloping lot.
Or you want the widest model and some of the lots wont fit that model. Get the idea?

Paying, herein our state, they usually ask for a 10% downpayment until the house is done. We have a few mortgage companies that do a construction loan and a end mortgage all in one. This is a great way to go because it saves you closing twice and 2 closing costs. And most builders are familiar with these large companies and they usually go smooth.

Your first step should be..find a lender that does a 2 in 1 and has an experienced laon officer that can sit down and explain the whole process to you.

Good luck! Have fun..a new home is sooo exciting!

VickiWatzlawick
Broker Owner
Exit Platinum Realty
www.vickisdreamhomes.com

Answer 4

Technically, you will no longer very own the domicile till after the remaining. Thats once you initiate paying the interior maximum loan and coverage, and so on. before that the builder owns it. I quite have in no way heard of a builder remaining on a sparkling domicile before it extremely is totally finished. the comparable is going for coverage- you may insure it beginning up the day you extremely close on the valuables and very own it. Your taxes for this 3 hundred and sixty 5 days could be for unimproved supplies, in fact an empty lot. It does not be till next 3 hundred and sixty 5 days whilst your supplies is re assesed which you would be taxed for having the domicile on it (which will in all probability strengthen your taxes because of the fact the fee of the land would be larger with the domicile on it).