Financing Your New Home: A Comprehensive Guide
Are you ready to start the journey of constructing your new home but unsure where to begin with financing? At Value Build Homes, we’re here to guide you through the financing process, ensuring that your investment in a custom home is as smooth as possible. Building a new home is one of the most significant financial decisions you will ever make, and we’re committed to helping you understand your options.
Financing Options: Build with Confidence
While paying cash for your new home is always an option, many buyers choose to finance their construction. Here’s what you need to know about financing your build:
- Use Land Equity: If you already own land, you may be able to leverage its equity as a down payment.
- Construction to Permanent Loans: We highly recommend obtaining a Construction to Permanent Loan, which simplifies the process with a single closing for both land and home financing.
Benefits of a Construction to Permanent Loan:
- Comprehensive Financing: Covers both the land purchase and the construction of your home.
- Amortization Flexibility: Options to amortize the loan for up to 30 years, making it easier to manage your payments.
Steps to Secure Financing
- Start your journey by finding an experienced lender skilled in home construction financing.
- At Value Build Homes, we regularly partner with reputable mortgage lenders who can assist you in finding the right loan for your needs. Explore our Financing partners here.
- The approval process for a Construction to Permanent Loan is similar to a standard mortgage loan.
- Lenders will review your credit history and score and require documentation detailing your income, assets, and liabilities.
- Both you and your builder must sign various documents to keep the process moving smoothly.
- Once all paperwork is completed, funds will be disbursed in "draws" throughout the construction process.
- During construction, you will typically make interest-only payments on the loan balance.
- After completing your home, your lender will issue the final draw once the final inspection is conducted and the Certificate of Occupancy is obtained.
- With all construction payments settled, you’ll be ready to move in, and your loan will seamlessly transition to a permanent mortgage.
- You’ll then begin making monthly principal and interest payments.
Top Recommended Mortgage Lenders
At Value Build Homes, we are committed to connecting you with top mortgage lenders specializing in home construction financing. Our financing partners can provide the guidance and expertise to navigate the process confidently.*
*The advertised 30-year fixed-rate FHA loan assumes: 95% loan-to-value (LTV) on a loan amount of $183,341, a minimum 720 FICO score, 1 discount point, for a primary residence. The interest rate is 4.875%, with a 6.005% APR, with monthly principal and interest payment of $987.23. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by the Lender. Payments shown do not include taxes or insurance, actual payment obligations will be greater. Not all applicants will qualify. Rates and terms are effective 1/10/2025 and are subject to change without notice. This offer is available for a limited time only and cannot be combined with other promotions. Availability is offered on a first-come, first-served basis. CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3838 Camino del Rio N Suite 305, San Diego, CA 92108. Corporate phone (888) 488-3807. For more licensing information visit: https://onetrusthomeloans.com/licensing-information/ . These are FHA programs. Please call your local HUD office to verify or visit their website at https://www.hud.gov/program_offices/housing .
