Rebecca Richardson - Mortgage Consultant
Buying a New Construction Home
Are you're searching for homes and you're not finding what you love? Now you start to think maybe you should build.
New construction can be a great option to make sure that you're getting exactly what you want in your house and you're finding a home that you love. The one thing to keep in mind when it comes to new construction, is that you want to make sure that the mortgage that you are getting is a competitive one, because a lot of times when you go into these neighborhoods, they're going to have a preferred lender, sometimes that as a lender that the builder themselves have formed for the purpose of generating the mortgages on their homes, on the homes that they are selling. Then sometimes it's a lender partner that is outside of the builder.
The thing to keep in mind, though, is that you are not required to use the builders lender, you are incentivized a lot of times from the standpoint of maybe some closing costs credits, and who doesn't want to turn down free money. But the thing is, is it's not free money. A lot of times when clients have brought those estimates to me, and I've been able to compare them against what we are able to do, we are often able to save money over their estimates because what happens is that let's say that you're getting $2,000 in closing costs, your closing cost might actually be $2,000 higher with that builder. It's not actually an advantage and there are no real savings. Or sometimes what happens is a higher interest rate is being charged to pay for that credit, which is fine. That is a fine strategy to pay a higher rate to pay less in fees, but you should understand why you are spending your money and how you are spending your money.
I always encourage you if you are looking at new construction, to get a good quality, the second opinion on the estimate to make sure that this mortgage that you are going to have for years to come is the very best one that you can have. And so you're spending the least amount of money on the home that you love.