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10-12-2010 10:47 AM
I have found a new construction home that I really like. problem is, I don't have a realtor (do I need one?) and I am not quite sure how to go about getting preapproval. the builder has a lending group and they would like me to go through them of course (there are steep discounts towards my closing costs if I go through them). my questions are:
1. should I try to get rates/preapproval from other lenders, since my credit is going to be pulled
2. do I need to have my credit pulled for this?
3. how much will this hurt my score?
any help is appreciated, thanks
10-12-2010 02:59 PM
I would talk to at least 2 other banks in addition to there own financing they are offering you... I have heard builders financing tends to be higher, but not for sure.
mortgage pulls all done within a 30 day period I believe are grouped together so they don't hurt your score.
10-13-2010 01:39 PM - edited 10-13-2010 01:40 PM
I'd like to learn more about the process of buying new construction. If anyone here has purchased a home (new construction) I would really appreciate hearing about it. (loan process, building process, upgrades, walk throughs, anything would be helpful) I would also appreciate if anyone found good information on the internet if they could point to it. I did a search and not coming up with much information.
10-15-2010 08:54 AM
My husband & I purchased a new construction home in April of this year,after looking in the resale market for 8 months and not finding anything. We're in Arizona.
We received a really good deal: it was a spec house that they had been trying to sell for a few months with no takers. They reduced the price by $30,000.00 and threw in incentives like closing costs paid & free upgrades. We had already been preapproved through a lender since we had already been looking, @ 4.9-5.5%. We were approved trhough the builders lender at 4.5% interest. We decided to go with the builders lender so we could get the closing costs. All they required was half of the down payment (we did FHA - 3.5% down) in a cashiers or teller check. The remainder due at closing. We really didn't hear much from the loan company until about a month before closing. They called and asked us for some clarifications, pay check stubs, etc. They were easy to deal with. They emailed us copies of the GFE so we knew what we were getting into. We closed the same day as our final walkthrough.
The builder also had an insurance broker we had to go through for homeowners insurance. They contacted us, gave us quotes, and we were good to go. We were free to change insurance companies after we closed, but as it turns out - they were very well priced (lower than what I could get through our insurance company).
With that done, they scheduled us to go to their design center to pick out cabinets, flooring, etc, then they scheduled the installation. It was just short of two months until we were closed and moved in. We had 2 walkt-throughs before we closed. I think we went and saw the house every weekend to see what new things had been installed.
Our house came with a 1 year warranty and then manufactuer warranties on all appliances. They do a 3 month, 6 month, & 1 year check up on the house. They've always responded quickly to any issues we've had - no major issues as of yet.
We have friends that live 4 houses down from ours and they built theirs from the ground up. Their house was done in about4 or 5 months. It was very quick.
A few suggestions:
*Make sure you do some research on the builder to make sure there aren't any issues with them. I know several people that have homes that built and they've had nothing but problems.
*Make sure you research the area. If you see people outside, ask them if they like their homes and how their experience was. I wish we had done this - we would have known about the terrible pigeon problem in the neighborhood before we moved in!
*If you do go with the new builder: Beware of the design centers. They have all the nice shiny new appliances, counter tops, cabinets, etc. If you are on a budget, don't get to carried away. While it is convienant to get everything from the builder ( washer, dryers, fans, blinds etc.), you can get a better deal sometimes at Lowes, Sears or Home Depot.A lot of times they will only carry one brand (like GE), so you may have limited options.
Overall, I think it was fun. We got a really nice house that we didn't have to change a thing to and all we had to do was move in! Right now a lot of builders are selling new homes at really great prices. Just beware that you don't over pay for the market. After two months in our home, 3 short sales we went on the next block for $50,000.00 less than we purchased our house for. If you're planning on staying a while - new construction is worth it IMHO.
I hope this helps
10-17-2010 03:32 PM
We just bought new construction. We loved our experience! We had credit under 700 high 600's about 3000 dollars in debt. You do not need a realator! The builder did everything for us gave us 5% toward closing and buying down our loan. We were allowed 20000 in upgrades that we tied into the loan amount. I don't know how people buy used houses. Our home is gorgeous! And new! We built it our way! We love our neighbors all young professional and on a cul de sac. We loved the whole process took 6 months to build our home and get through escrow but everything happened on time. No funny business......no long waits great communication.....it was an amazing experience we are in California and we closed Sept 10 and got 4.5% fha over 30 years......WOW.....we never thought we would own a home and we are thrilled...trust your builder they will do right by you.
10-24-2010 07:38 PM - edited 10-24-2010 07:47 PM
Thank you both for answering. We have been looking for a short time now but no luck. Of course each house has something that we do not like about it, beautiful curb appeal but inside nothing special or the other way around. I looked into a new construction loan and was quoted 6%. For a conventional, I was quoted a 3.75 (15yrs) or a 4.5% 30 years. Just the preliminaries. They are looking at our middle scores 777 / 764. We saved 100k for our down payment.
I have not met with any builders and have some very basic questions. When you say you are given an allowance, do you get basic flooring, appliances ect and the allowance allows you to upgrade (example, basic is carpeting then can upgrade to hardwood floors). How about with appliances and what else? What about windows? How does this work?
Lets say I want granite counters and hardwood flooring but did not get a loan for that amount. If I continue to save and have the money when they get to that part of the construction can I pay cash for the upgrades.
In the end I prefer to live in a little smaller house and have the interior exacltly as I would like. My goal is to have the 20% down so I don't have to pay pmi. I would LOVE to design it myself but I would be afraid of being dissapointed in not being able to afford the changes that I would want.
Thanks for answering.
10-25-2010 07:11 AM
As far as what's included or what's considered an upgrade, it's all dependent upon your builder and the contracted companies they work with. I closed on my house almost a year ago and in areas like the basement, foyer, bathrooms and kitchen, I had the option of vinyl, hardwood or tile -- all options were included at no additional pricing. No surprises in terms of cost for me -- the intial write up I was given the day of my contract matched my offical GFE given just before closing. My closing was pushed back 2 months due to permitting issues and I ended up actually getting back a check the day I closed!