Financing a New Build in Burleson, TX: What's Different and What to Expect
Financing the construction of a new home in Burleson, TX, is a unique process that differs from securing a mortgage for an existing property. If you're considering building your dream home in this vibrant community, it's essential to understand the nuances of financing a new build. In this blog post, we'll explore what sets new construction financing apart and provide insights into what to expect when financing your new build in Burleson, TX.
Key Differences in Financing a New Build:
1. Construction Loans: When you build a new home, you typically need a construction loan, which is distinct from a traditional mortgage. A construction loan provides funds for the construction phase and is usually interest-only during this period.
2. Disbursement Schedule: Construction loans are disbursed in stages as the construction progresses. Funds are released to cover specific phases of the build, such as foundation, framing, and completion. This differs from a lump-sum mortgage payment for an existing home.
3. Interest Rates: Interest rates for construction loans may be higher than those for traditional mortgages. However, once construction is complete, you can often convert the construction loan into a permanent mortgage with a more favorable rate.
4. Shorter Terms: Construction loans typically have shorter terms, often 12 to 18 months, to coincide with the construction timeline.
5. Down Payment: You may be required to make a larger down payment for a construction loan compared to a mortgage. Expect to provide 20% to 25% of the project's total cost as a down payment.
What to Expect When Financing a New Build:
1. Loan Application: Begin by applying for a construction loan through a lender or financial institution. The application process involves providing detailed information about your financial situation, credit history, and the construction project.
2. Builder Approval: Your chosen builder must be approved by the lender. The builder's reputation, experience, and financial stability play a role in this approval process.
3. Loan Approval: Once the lender approves your application, they will determine the loan amount, interest rate, and disbursement schedule. You'll receive a commitment letter outlining the terms and conditions.
4. Construction Begins: With the construction loan secured, your builder can start the construction process. Funds will be disbursed as needed to cover the various stages of the build.
5. Interest-Only Payments: During construction, you'll make interest-only payments on the loan. These payments are based on the amount disbursed, not the total loan amount.
6. Transition to a Mortgage: Once construction is complete, you can transition the construction loan into a permanent mortgage. This process is often referred to as a "construction-to-permanent loan" or "one-time close loan."
7. Appraisal and Final Inspection: An appraisal and final inspection will be conducted to determine the home's market value and ensure it meets quality and safety standards.
8. Closing: At the final closing, you'll sign the permanent mortgage documents and begin making principal and interest payments based on the mortgage terms.
Financing a new build in Burleson, TX, can be a rewarding experience, but it requires a clear understanding of the process and the unique aspects of construction loans. Working with a knowledgeable lender and builder who are experienced in new construction financing is essential to ensure a smooth and successful homebuilding journey in this vibrant and welcoming community. . 🏠📚👨👩👧👦
Please call us at 469-269-6541 for more details about city of Burleson and available homes!
About us: Burleson New Construction Expert Real Estate Agent
As a Top Real Estate Professional in Burleson, I understand the challenges that arise when buying a new construction home. There are over 100 builders in the DFW area. I work with most of the new home builders in Burleson and understand how various builders operate. I am familiar with the options they offer, current incentives and I frequently visit the upcoming communities they are building. I guide my clients through all steps of the new home construction process and aggressively protect their interests in the transaction.
As a holder of top real estate industry certifications and designations like CRS, ABR & GRI, I can offer my clients experience as a Buyer's Agent and REALTOR®, top Industry Customer Service, in-depth, up-to-the-minute and comprehensive market knowledge; honesty, integrity, dedication, and professionalism in my business.
Whether you are a first time buyer in Burleson looking to buy a home whether you are relocating to Burleson from California or moving your entire family from areas like San Francisco, Fremont, Palo Alto, Los Angeles, San Diego in California due to job transfer with your company, I can help you find a new construction home in Burleson. Our relocation team eases the transition - whether you are moving across town or across the globe. We will work with you to find an area that best suits your professional, family and lifestyle needs. We have all the tools you need to help your home search. Whether it is video previews of homes, extended work hours, digital signatures for documents or more, we can make this process as comfortable as possible no matter where you are located.
What is most important to you in your new construction home in Burleson? Send us an email at info@NitinGuptaDFW.com or give us a call at (469) 269-6541 to schedule a no obligation consultation. We’ll give you honest advice about Burleson that you can use to help make your home buying decision.
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