Mortgage Loans

[dtjones052209]

My wife and I are in the process of trying to decide if it is better to build or buy a pre existing home. In our daily debate we are leaning more towards building a home here in Texas, but are unsure of what loans will allow for builders in subdivisions to build. Is there any different in the type of loan needed to have the house built? We will be first time home buyers with a combine income of 166,000 a year. Our scores are borderline between FHA and Conventional area. Which would be the easiest to to have a home built? Any input would greatly be appreciated.

[Mike_B03]

It sounds like you are talking about building a new home in a new build subdivision, not building a home on a piece of land of your own, also known as a "construction loan", right?

Personally, I think think getting a loan on a new build home is easier than a loan for a pre-existing home. I've seen this mentioned online and the logic is that if you go with the builder's lender, they are more vested interest in getting the loan done (they want to sell the house and they also want to do the loan, so they win on two ends). As for the type off loan, he same exist for either type off home...FHA, Conventional, VA and they have the same requirements.

Aside from the loan aspect, I think going with a new home can't be beat. Not only is it new, with a warranty, but you get to customize the home for your needs and you are part of the construction process, you see the home go up which is a great experience in itself.

[DallasLoanGuy]

Construction lending as a bit different.

It is a high credit score deal.....

Do you own the lot? Can you buy the lot?

[DallasLoanGuy]

typically, in a subdivision, the guy building homes there ownes all of the land.... I have never seen anyone buy a lot and bring in their own builder....
the guy who owns the land wants to sell all of his houses.... they would be ver concerned with another builder in their sandbox. What if the guy you hire builds a substandard home and drags down the average price? You see?

[MovingForward_2012]

+1, we are buying a new construction in a new subdivision. We are hoping to close in a week. All possible loan programs are typically available. And as Mike said, the warranty is fabulous as you will have less Maintenance and Repairs for the first few years.

[MovingForward_2012]

We also are buying the land that the property is on.

[violetsmom]

Do it!

We are building new (and same salary coincidentally!), it is my any more difficult to get a loan on a new build than an existing home. And as others have mentioned, usually if you use the builders preferred lender there are excellent incentives for the buyer. The only downside ice encountered this far is the insane wait and stress if knowing that credit report will be run again in a few months (we close late April or early May)...

Also, another huge bonus to building new in my opinion is the fact that you don't have to spend hours upon hours, among months even, pounding the pavement with a realtor trying to find a house. Trying to arrange child care, work schedules and the like to do this make me want to stab my eyes out

We chose our location, chose our house and it's design and saves tons of time not searching for an existing home that *may* have the things we need..

Sorry I'm rambling, good luck with your decision!

[MovingForward_2012]

+1, we are buying a new construction that is already built and it is their top model with $51,000 in upgrades. So once we close, we move in. We couldn't wait for our home to be built because we are on a very short timetable. So even if you are on a short time schedule, many builders have "quick move-in" homes or homes that have already started the build process on their website.

[tooleman694]

We are building in Texas, DFW area. You get less home for the money when you build new, but you get it the way you want it.

With your high income, if you go FHA you wont be able to get as much of a home because of the loan limits. In Texas the limits are too low.

Your probably wanna go conventional if you have the score and want a nicer home.

[JM-AM]

While there are limits its based on area.

In tooleman case FHA limits are low but FHA may be a little higher in a different market in the same state.

Just to clarify Conventional has limits also. After a certain point you have to do non conforming or jumbo. Qualifications are usually stricter and rates are usually higher.