Some New Construction Questions

[0x2D]

Good morning. I apologize if this is the wrong place, but I couldn't find a definitive answer elsewhere.

So my new wife and I currently have a house, in her name. She had it before we get married. We're hoping to move next year, probably around this time.

We have been looking into all kinds of houses, but never really considered new construction. Now I'm wondering if we should, and have a few questions.

First, would we qualify for the process? We will have scores each ~740 next year at this time, ~$60k in the bank, and CLIs totaling ~$60k. The current house can be sold for ~$180k, and should have ~$160k due on it next year. We combine for ~$170k / year income.

Secondly, what is the actual process? Would we pick out a plot & a home to build? Would we get a loan for a plot, then another loan for a house? I don't think we want to go hyper-custom from-scratch requiring an architect, probably moreso pick out of a few plans, maybe move some things around and such.

Would rural vs. city change things at all? We live in central IL, and would probably lean towards somewhere on the outskirts / just outside of town. I know my neighbor's brother sells farmland and lots, perhaps he could find us some land.

Thanks so much, and if I missed anything, let me know!

[0x2D]

I (OP) just found this, is it a fairly reasonable walkthrough?

http://www.moneycrashers.com/new-home-construction-loan/

If so, does anyone have any good experience with any companies for these loans? Is this something a credit union would have any part in? We have 2 checking, 2 savings, 2 CCs, and have had 3 auto loans with ours, they seem to like us

Thanks!

[Amythyst]

I'm not sure how or why a construction loan would become necessary as part of the building process... maybe if you're building on your own land?  If you go with a builder in a neighborhood they have lots in, then the way it works typically is you do pick the lot that you want (and the one that will support the floor plan/house you want) and then you sign a contract.  We had to give our builder 5k as a "deposit" but all builders are different and require different "earnest money" downpayments.  Then, either before you sign a contract or immediately afterward, you would need to be preapproved with a lender.  Most all builders have their own preferred lenders and usually give you incentives to use theirs.  You don't have to... but you should weigh the pros and cons of your own financing vs their preferred lender.  Then the house gets built and towards the end of it finishing you start working more on your loan application and getting everything finalized.  Then, you close.

That's it in a teeny nutshell.