New Home Financing Options

New home financing may not seem as exciting as dreaming of all the features and options you want in your new home but choosing the right mortgage can help make your dreams come true.

The first step is deciding if you want to purchase or build a new construction home or buy a resale home. If you’ve decided to go with a new construction home, what type of community and amenities are you looking for? If you are over 55 or retired, you may want to consider building in a 55+ community where the homes may be designed for aging in place.

Buying in a New Home Community

Before you begin to shop for your dream home and browse through various builder communities, floor plans and personalization options, don’t forget to make a list of financial information you will need to get pre-approved for a mortgage. You’ll want to know what your credit score is, what information you will need to get a mortgage and what your loan options are.

Many medium and large builders work with local mortgage and title companies or may even have their own in-house lending company. This allows them to offer qualified buyers an entire financing package which may also include incentives such as upgrades or price breaks on their new home. Using this option can often reduce the time it takes to process the loan and close on your new home.

Of course, it’s always a good idea to shop around and educate yourself on all the new home financing options available to you before deciding on where to get your mortgage to make sure you are getting the best deal.

Types of Mortgages

Conventional Mortgages

Conventional mortgages are the most common type of mortgage offered by most lenders and have stricter requirements than government-backed mortgages. They are conforming loans and adhere to the Fannie Mae and Freddie Mac guidelines with conforming loan limits.

Fixed Rate: This is the most common home mortgage. Most fixed-rate mortgages have a term of either 15 or 30 years. The mortgage interest rate stays the same for the entire loan term. Fixed-rate loans offer more stability and predictability than adjustable-rate loans which makes it easier to budget for your housing costs.
Adjustable Rate: Adjustable-rate mortgages have a variable interest rate. They are often fixed for an initial period, such as five years, and then adjust annually for the remainder of the loan term. The interest rate usually starts out lower than a fixed-rate loan, but the rate can increase over time making them more unpredictable and harder to budget for.

Government-Backed Mortgage Programs

VA loans are backed by the Department of Veterans Affairs. They don’t require a down payment or mortgage insurance but do have an upfront funding fee.
USDA home loans are mortgages backed or issued by the U.S. Department of Agriculture. They don’t require a down payment but do include fees and are generally only available in rural areas.
FHA mortgages are backed by the Federal Housing Administration. They can allow home buyers to get a mortgage with a lower credit score but do have mandatory mortgage insurance premiums.

New Home Financing Options

Buying in a New Home Community

Types of Mortgages

Conventional Mortgages

Government-Backed Mortgage Programs

Epcon Communities