Is New Home Construction Right For A First Time Home Buyer?
If it’s your first time buying a home, one of the many decisions you are going to face is whether or not you should buy an existing home, or go for new home construction. It’s a daunting decision, because most buyers recognize new home construction as a prime opportunity to design and build a dream home while saving themselves money and stress on the repairs, maintenance, and older appliance repair that an existing home often entails.
You’re not alone if you’re considering buying a new construction home as a first-time buyer. TD Bank’s First-Time Home Buyer Pulse looked into this and found that nearly a third of all consumers looking for their first home have interest in a new construction, and nearly 40% of millennials think about new homes.
Freedom to Customize
A new construction for your home lets you design the home layout plan from end to end and top to bottom. You can pick out everything from finishes and cabinets to individual bath fixtures. A handful of builders even let you move the interior walls of their predesigned models and pick individual lots within their communities where you can place your new home.
Certain amenities seem to be more attractive to buyers than others. They include attractive design, a good backyard or a swimming pool, and technologies that are at least energy-efficient, if not full-on smart home features. Of course all of this comes with a price tag, so you have to develop a budget alongside your wish list, as the two will eventually have to reconcile with one another. Your budget will help you choose custom dream home floor plan options that are within your financial reach and grasp.
You do need to make sure that the home you’re thinking about is the one you’re actually going to get. You have to learn how to visualize a new home from things like floor plans and software-generated imagery or virtual tours. Model home views aren’t often available until a building project is underway, and given that this is likely to be the largest single expense of your life, you need to thoroughly research your builder before you sign your contract.
Exploring Your Options for Financing
One of the most critical elements to this whole process is financing, so it’s essential that you find yourself a lender who believes in and practices open and continuing communication every step of the way. In fact, this should probably be the initial step you take, before you even choose a builder. Once you have a lender chosen, then a mortgage loan officer can steer you towards the right financing options and choices.
Be mindful of the fact that a new home construction costs can prove expensive. On the other hand, there are construction mortgages that help keep your expenses down with features like interest-only monthly payments happening during the actual building phase. For instance, one common construction-to-permanent loan lets buyers make only interest payments for the first year on the majority of the construction costs. After that initial year is up and construction is finished, only then do interest and principle payments apply for the totality of the loan. A construction loan can make a new home construction a much stronger financial possibility.
Seek Out Professional Experience and Advice
A mortgage loan officer can provide you experience, expertise, and advice through every single step of the process, whether it’s getting a prequalification letter or renewing mortgage paperwork for a final sale. A great officer will help you and your builder through the long process of identifying the particular products that make the most sense for the construction of your new home. Also, if you haven’t chosen a particular builder yet, you might want to look for an architect to help you design your new home.