Buying A Home
Hmp123
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Has anyone had a house built?
If so, where did you get your loan to build from. We'd like to build, but have no idea where to even start with getting a loan.
Re: Has anyone had a house built?
We've been thinking about it. Just so you know pretty much all banks require 20% of the cost. Do you already own land? If not do you have enough money to pay cash for it? If not that is were it gets tricky, because then you need a land loan and a construction loan. To be completely honest, I would much rather buy a home that has already been constructed, building and buying land seems like a whole lot of work!
ETA: Just make an appointment with a mortgage person at your bank to get an idea of the process.
*** My Bio *** For Sale ***
We are currently in the process of building. We found a community that is being constructed through a builder. The process is pretty simple. Most banks around me do not do new construction loans. Luckily, our builder works with a mortgage company and we just opted to use them. A lot of builders may finance the home for you but there are some banks that will do new construction loans. I would look into the builder companies around you and inquire.
Good luck and happy building!
We are also building with a local builder. They own the land already (as most builders do that have a development) and we were lucky enough to get a lot at the end of a cul-de-sace. We just put a $500 deposit down on the lot and got started.
Esentially, the builder or a bank is backing the build and they own the land so when building is done they combine the lot and house costs and sell it to us so we don't pay for anything until it is done.
When we first met with them they handed me 6 business cards for local loan officers. These people all knew about our builder, their incentives, timelines, etc. It is making it much easier that they have people that know about them that they can recommend. I called all 6 of them because they all appeal to different types of buyers. We are looking to do a 90-day rate lock and only 2 offered that. One of those had a consistently lower APR so we went with him. He knows all of the steps and timelines of a build so it makes life pretty easy.
If you want to do a custom home on a lot you purchase that is a different ball game. You will need a loan for the land and one for the build. Generally, you will have to start paying on the land loan right away and may have to pay the interest on the construction loan while you build. This can make it difficult to live if you are paying another mortgage or rent while you build.
Our build was just completed on 7/13 and we started moving immediately after.
My husband and I were able to secure the loan for the construction through our bank. We were able to put 20% down and carry the loan ourselves, instead of the builder carrying it. The advantage to this was - we didn't pay a mark up from the builder, paid exactly what the electricity bills were and the draws that were owed to the contractors. We paid out 3 installments total through the process.
On the other hand, I have clients (DH & I are real estate agents) who are building with the same builder on a lot 2 doors down. They didn't have the cash to be able to finance the build like we did instead putting 8% down to the lender that the builder uses, essentially their earnest money. Their mortgage will be from that bank and will close like any 'normal' home sale.
Hope this helps!