Hosted by: Citrus County Building Alliance
February 14 - March 1, 2020
Citrus County Building Alliance
1196 S. Lecanto Highway, Lecanto, FL 34461
*Did you know that some people don’t even consider new construction because they mistakenly think it’s automatically more expensive or more complicated process than buying a resale home?
But, by excluding new construction from your home search you may miss out on a chance to own a home that is perfect for you & your family.
Here are some answers to some of the most commonly asked questions. Please take the time to review them we may be able to enlighten you in regard to some of the misconceptions about building a new home.
GENERAL HOME BUYING/BUILDING QUESTIONS
Q: Do I build or buy an existing home?
Q: When is the best time to build?
A: The cost of construction continues to go up every year, the phase “there is no time like the present” certainly holds true. The cost of materials also continues to rise every year, so very pricing is unlikely to diminish.
Q: Should I sell my home first?
A: You don’t have to, If you have cash to build or can qualify for your new home mortgage without selling your present home. You could start construction and list your home. Hopefully by the time you have completed construction, your present home will be sold. (Normally financing is available without selling to those who have a very small mortgage on their present home, and have 20% or more to put down, so they can afford to start construction before selling.)
Q: Which comes first-the lot? Or the floor plan?
A: This is a question that varies depending on your needs. If you have a specific style of home or floor plan you are wanting to build, then you need to find a lot that will allow you to build that type of home on it. If you are looking for a certain area to build in and lots maybe limited, then you will need determine what style or styles of homes that will best suit your lot. It’s best to look at lots and at floor
Q: How do prices vary from builder to builder?
A: It is fortunate that we have so many competent & skilled builders to choose from in our area that can build in a variety of subdivisions. So you not only have the choice of the floor plan you want, but also the Builder to build it!
LENDING & MORTGAGE QUESTIONS
Q: When should I apply for a new home loan?
A: Now!! Loans applications can be complex and require much documentation and take up to six weeks, so the sooner the better. By getting a lenders’ pre-Approval you can have any idea of what you can afford to put in your New home.
Q: Are lenders lending on New Construction?
Q: Can I use my lender from up north?
A: It is best to use a lender that is familiar with building in the area you are considering construction your New Home, and that has a relationship with the builder you are consider as it makes the process typically smoother for all parties.
Q: What can I afford to spend on my new Home?
A: Generally speaking most financial planners general rule of thumb is that one’s mortgage payment shouldn’t exceed 25% to 30% of your monthly income.
Q: What Credit score do I need to have to obtain a financing to build my new home?
A: Again, minimum credit scores can vary by Lender as well as the loan program you are considering. The minimum credit scores required currently are ranging between 640 to 720. Again depending on the lender and the program you are using. Of course the better your credit score the better the interest rate you with be able to obtain.
Q: What are the current interest rates available for New Construction?
A: Current interest rates can very, again depending on the lender as well as your credit score. But currently as of Feb 2017 rates are trending at all time lows, between 4% and 5% for 30 year fixed rate .
$1018.13 (w/out the taxes & Insurance).
Q: How much will I be required to put down on when building my New Home?
A: Required down payments vary by lender to lender & Loan Program to Program, as well as some banks do not offer Construction/Perm Loans. It is best to talk to your potential Builder to see what banks in their area they would recommend who offer this type of loan. But, currently the available lender programs can range from 5% to 30% down toward a Construction Loan.
Q: I own my lot outright (with no mortgage) will the banks give me “lot equity” towards my down payment requirement?
A: Yes, most Lenders will give you the current appraised value of your land as equity credit towards your down payment requirements. Therefore some Buyers find they do not have to bring any money to the table should they have sufficient equity in their land.
Q: How does a Construction Mortgage work?
A: A construction Mortgage may seem complicated to those of you who are not familiar with financing, and fortunately your lender will be doing most of the work for you, but here is a brief explanation of the process.
A construction loan is a short term loan obtained to finance the construction of a new home. It is almost always required where the buyer owns a lot or is purchasing a lot. In these cases the buyer will also be obtaining an end-loan or a permanent mortgage. This is usually done at the same time and in conjunction with the Construction loan (this is also known as a C/P loan or Construction Perm Loan.) Most lenders take care of both loans. You in fact are hiring the Builder to build your home. You own your home during construction vs. the Builder owning the home. You with the help for your Lender will pay the Builder for the work that is completed as the house is being built. This is done in the form of a “Draw”. A draw is the money which has been paid out of your construction mortgage fund that has been set aside to be paid out solely for your new home’s construction.
There are usually 5 draws made to a Builder through your lender during construction. When the builder completes a pre-determined percentage of construction he will notify your lender that a draw is needed. During this construction phase you as the buyer will be responsible to pay interest only (usually prime plus) on the monies paid out during the time of construction. At the time your house is completed and your builder request the final draw, after your home is completed and accepted and all funds have been disbursed, your loan will be converted typically to principle and interest payments. Your monthly payment will be determined by your interest rate, the total loan funds disbursed and the remaining loan term. In additional your monthly payment could include Private mortgage insurance (PMI) premium, hazard insurance, and real estate taxes, (this is known as escrows.)
For more information on Construction Perm loans please speak with your Lender.
Today’s New Homes offer more benefits than ever before. Here’s a quick list of the top 10 reasons to buy a NEW HOME in 2020!
1) DESIGN YOUR DREAM HOME YOUR WAY!
2) CHOOSE A FLOORPLAN AND ROOM LAYOUT THAT MEETS YOUR NEEDS!
3) MORE SPACE FOR YOU!
4) ALL NEW, UNDER WARRANTY!
5) ENERGY COST SAVINGS
6) COMFORT AND INDOOR AIR QUALITY!
7) LOW MAINTANANCE!
8) ADVANCED TECHNOLOGY AND DESIGN
10) THAT NEW HOME FEEL!
After all, New Homes offer the latest in designs, style, comfort and quality. They provide a care-free lifestyle so that you can enjoy your home not work on it.
Start shopping now and visit our builders showcasing their designs in this year’s “Citrus County 2020 Spring Showcase of Homes”.