A new construction project allows the buyer to choose a lot and a brand-new home design. The location of the lot determines what the buyer can build there. A lender can help them determine the best course of action when financing a new construction property.
How Much Is Available to the Buyer?
Lenders complete a preapproval for buyers that want to purchase a brand-new home. The preapproval shows how much they can borrow altogether for the lot and the home construction project. When evaluating the total cost, the lender can show the buyer how much they can spend on each step of the project and what limitations apply. The mortgage type could limit some decisions about the property.
Finding the Best Lot
When reviewing a lot for a new home construction, the buyer must make distinctions about the lot and where it is located. For example, if it is in a planned community or subdivision, the buyer cannot build just any home design on the property.
A lot that is outside a planned community and on private land, the buyer has more opportunities. They won’t have to consult a homeowner’s association or use the same builder that other buyers used for a property inside a planned community.
Restrictions and Possible Issues
The mortgage defines what limitations or issues could arise. For example, if the new property is a condo, the buyer must adhere to condo association bylaws. If they are using an FHA mortgage, the property must be their primary home. If they use a VA mortgage, the property must meet all guidelines as outlined by Veteran’s Affairs.
When building on a private lot that isn’t inside a planned community, the buyer will need to install plumbing lines and utility lines. This could increase the total cost of the home design and exceed the budget. The buyer should evaluate these factors before choosing a lot.
Selecting a Custom Home Design
The home design cannot exceed the remaining balance of the mortgage. The builder will provide a complete home design according to the mortgage amount available to the buyer. They can make modifications to the original design and find out what options are best suited for the property. Buyers can learn more about getting a mortgage for a new construction by reviewing Dustin Dimisa’s Twitter page now.
How the Property is Financed
First, the buyer finances the lot with the mortgage, the home isn’t included in the mortgage until after it is built. The mortgage lender transfers the payment for the home at the property closing. The buyer may have to pay on the lot before the closing depending on how long the construction project takes.
A new construction is a great opportunity for buyers who want to customize their property and get all the great features they want in the first place. The projects give the buyer a chance to choose a lot and a beautiful home design according to their budget. Home buyers can learn more about financing a new construction by contacting a lender now.