In some ways, the construction financing of a new home is similar to buying a resale home. Quite a few differences exist as well, though. We’ll explain the options and types of loans for a custom home construction.
The process is not unlike buying an existing property. You look for the best rates, speak with banks and mortgage brokers, etc. When financing a new home construction, you actually have a few more options. For one, the contractor’s company may offer its own program or one through an affiliated mortgage subsidiary.
You also have a few nifty resources at your disposal. This includes construction financing and bridge loans. Other options to explore include:
- FHA Loans: This government-backed loan is ideal for homebuyers with a few blemishes on their credit score. The loan has some generous credit underwriting, and down payments may be as low as 3.5%.
- VA Loans: This is an excellent loan option with zero down payment. To be eligible, though, you have to be a veteran of the U.S. Armed Forces.
- Conventional Loans: This may be your best bet if you are able to afford a 10% to 20% down payment.
Beyond the extended options, the process more or less is just like purchasing a home. Obtain your national credit files from all three credit bureaus. You should also obtain your FICO credit score, also available in any of the credit bureaus. Other information you’ll need includes 401K funds, assets, and IRS filings.
Having been in the custom home remodeling business for almost 30 years, Murphy Construction knows a thing or two about home financing. See our testimonials to learn why Spokane residents trust our industry expertise. We’ll guide you through the new home construction financing process if you require assistance.
Edited by Justin Vorhees
Serving clients in Spokane, East Spokane, Liberty Lake, and the Spokane Valley area