Mortgage Tips When Buying New Homes in the Hudson Valley
Your Basic Guide to A New Construction Home
If you have recently been looking to purchase a home in the Hudson Valley, you may have noticed many new homes that dot the landscape. There are subdivisions and single homes being built all over Orange, Ulster and Dutchess County. While many of those advertised are not built yet, new homes are popular. The reason being is really quite clear. New homes have added value.
Buying a new home can eliminate repairs or a potential headache that an older home can provide. No renovations or updates needed. They are turnkey and move in ready on closing day. The pricing of new homes compared to many resale homes can be quite similar. When considering the process and cost of updates and repairs, it seems like a logical choice to buy new. This value of buying new is where buyers are sold.
Many of my clients question if building new can work for them, and voice concerns about financing. A frequent myth that new homes are harder to finance is just not true. Truth be told, if you can qualify for a conventional or FHA mortgage you most likely will qualify for a new construction home mortgage.
The process of applying for a mortgage when buying a new construction home loan is really not that complicated. Many buyers disregard new homes thinking that they need a 10 or even 20% down payment to qualify. Add in closing costs and the thoughts of buying a new home are quickly tossed out the window. These are misguided assumptions, and it is an option that many buyers can and should consider.The loan for a new construction home is very similar to buying any other home.
I see builders accept as little as a 3.5 % down payment, purchasing a brand new home with a pre-construction contract. most often it is 5% with the buyer either paying closing costs out of pocket, or if possible adding those costs back into the mortgage. The amount of the down payment varies with the builder and type of new home. When building a more custom home a builder could look for a higher down payment as his risk increases should the buyer not be able to purchase the home. All these details are spelled out clearly in your contracts. Contacts are signed based on floor plans and spec sheets of what is included in the home. During this time the buyer does not own the land, or the house. Previously a buyer would need to purchase land and then hire a builder to construction the home. The buyer would be obtaining a construction mortgage. The buyer would then be paying the builder during the process and incurring costs during the entire building process. Things have changed and the process is much less difficult. A buyer obtains an “end loan” that only goes into effect after the home is built, title transfer and the buyer is able to move in.
Once contracts are signed the bank begins the appraisal process. The appraiser reviews all the details of your “to be built” home along with a visual inspection of the land where the home will be built. The appraiser begins his appraisal and gives a value for what the home will be worth upon completion. That number is needed for the building process to take place. At the end of construction the appraiser returns to make sure that the home was completed to specifications in the contract. The buyer is responsible for the cost of this second visit. Since it is not a new appraisal, it is not two appraisal fees. Once this is process is completed and the C of O is handed over to the builder we are ready for closing. The buyer would receive his mortgage commitment at this time and with an end loan in place from the buyers, the property transfers title.
New construction homes in the Hudson Valley are more affordable than ever. Their value is amazing and buyers see the benefits. Shiny and new is always a great selling point. If you purchase a home “to be built” you get to be in charge of picking out all the colors of tiles, flooring, cabinets, counter tops, and more. Your own personal touch is written all over the home. It is fun to be the first person to spend using everything brand new. Home for the holidays has a new meaning. The differences are obvious when buying a new home. Remember too that ALL New Construction Homes come with a warranty in the State of New York. Call and ask about the many opportunities in owning a brand new home. New Construction Homes in the Hudson Valley have never been a more logical choice.
How to Get A Mortgage For My New Construction Home
Resources for Mortgage and Lending in the Hudson Valley
Resources of Mortgage Information:
- U.S Department of Housing and Urban Development
- Homeownership Education in New York State
- Tips from the 25 Most Influential Mortgage and Real Estate Pros on G+
- 6 Tips When Mortgage Shopping
When you are ready to begin your search for a new home in the Hudson Valley let me help. You can find new homes based on location and your budget. Let me know what questions I can answer for you. Meanwhile take a look at some of these homes in the area and see what you think.
If you would like to receive more information like this please subscribe to my blog. No Spam No hassles, just info on local housing. Looking to buy a new home? Search the MLS for New Homes in the Hudson Valley. Feel free to contact me anytime at (845)-527-7115 or come visit me on Google+