Here’s the truth about financing your dream new-construction home.
Buying a home? Click here to perform a full home search.
Selling a home? Click here for a FREE home price valuation.
Are you considering building your dream home on a piece of land you've had your eye on for years? If so, you may be wondering how to finance your new-construction home. One question we hear often is whether it's possible to get financing with a low down payment for both the land and construction costs.
The short answer is no, unfortunately. You'll need to apply for a lot loan or a construction-to-permanent loan, which typically requires a larger down payment (usually around 10% to 30% depending on your credit). However, there are a few options available to you that may make financing your new home a little easier.
"There are options that will make the process of buying a new-construction home more manageable."
One option is to have your builder purchase the lot on your behalf and then build the home for you. This means that the builder will own the lot during the construction process, and you'll purchase the home from them when it's completed. You can typically finance this purchase with a low down payment using an FHA or conventional loan.
Another option is to purchase a spec home from a builder who already owns the land. These homes are usually ready in just a few months and can often be purchased with a small deposit of around $1,000 to $3,000. Some builders may even cover your closing costs, making this an attractive option for those who want to move into their new home quickly.
While financing a new-construction home may seem daunting, there are options available to make the process more manageable. If you have questions about financing your new home, don't hesitate to call or email me for guidance.
