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New Builds


Considering Building?

Your Dream Home Is Possible!

Suppose that in the process of looking for a home to buy, you can’t find something that meets your needs? Or maybe you don’t want the potential hassle of having to deal with the maintenance of an older house? A new-build may be your answer. Whether buying a new build or doing it yourself, it is possible to finance these two approaches.

To Buy Or DIY?

Building Yourself 

If you’re considering building a home yourself, then you’ll want to look at something called construction financing. As with a traditional mortgage, you still put a down payment on the property; however, the property’s final value includes the house you intend to build on it. For example, you may purchase bare land for $300,000 and want to put a house that costs $500,000 to build on that lot. The final value is $800,000 (which would require a minimum down payment of $40,000). The lender will want to see your plans and contracts for the house, so you need to prepare well before finalizing a purchase.

The funds are typically advanced in “draws” tied to the stages of construction, with periodic inspections to confirm that the work is proceeding as expected. The payments generally are ‘interest only’ on the amount already advanced, with a conversion to a standard mortgage term once construction is complete. However, every lender has its own policies, so your broker can help you figure out which direction to go.

Buying A New Build

Buying from a builder is also an attractive option. In this scenario, keep in mind that new homes are taxable, like any new purchase, and this tax amount is usually added to the property’s price and then included in the financing. Depending on when you buy a new home or how far in advance of completion you put in your offer, you will need to ensure you can arrange the financing.

Key Take-Away

Tailored Experience

Plan Ahead

Buying a brand new home or having one built to your exact specifications are both great ways to get the home of your dreams, but these both require careful planning, so it’s a good idea to talk to your broker in advance to work out a plan.

Some lenders offer long-term rate holds for new builds, though the rates are not likely to be competitive. Your best bet if you’re considering buying something brand new (especially if it hasn’t been finished yet) is to have a conversation with your broker to qualify you ahead of time and then decide on the timing for getting the financing approved.