To Buy or Build Home, That is the Question?

This is a tricky question, because it really depends who you ask.

If you ask a mortgage loan officer they are going to try to steer you toward buying a built home instead of building because getting a construction loan is a almost impossible these days. Trust me I know because I was in the mortgage business for over 12 years.  My suggestion is if you absolutely have to have a new home, then try to find a semi-custom “spec” (speculative) home. Meaning a developer buys a large plot of land and has multiple house plans from you to choose from. IF you and your real estate agent get under contract on a home that is in the middle of construction but not yet sold your home builder will usually let you pick out many things that fit your taste. Like: the type of flooring, paint colors, trim packages, counter tops, cabinets, even type of roof material, and landscaping so you get a new home with a custom feel without all the hassle of having to hire an architect, permitting, etc.

Since I am real estate agent, built my own home, and once owned a mortgage company I will answer the question for you from my experience.

To be honest with you building is kind of a pain, unless you have a great home  builder and bank. Right now banking and mortgage lending is NOT smooth sailing. It was a pain getting a construction loan when anyone with a pulse could qualify in 2004-2006.  So getting a construction loan now is even more of a nightmare. As an ex- mortgage loan professional I would not suggest building just for that reason alone.  You have to put down a lot more money then you would have to for just a traditional purchase.

If you still want to build just be prepared for a busy few months. Depending on the size of home, the finishes, the town you are building, among others, the process can be from 4 months to 2+ years. There are many meetings involved, decisions to be made, and things to consider, and with a lot of people. IF you really do your homework and find a great reputable, experienced builderthen you can make your process a little easier. In any event building a home is not usually an enjoyable experience, simply because there are so many choices and changes, that can test your nerves.

Precision Construction is Charleston’s best Affordable Home Builder

In closing my suggestion is to seriously think about it before making a decision. You may even consider buying an older home, or a foreclosure and renovating it to look new. If you want a like new home then I suggest letting me find you home that needs a lot of work then let a contractor redo it to your liking. Then you can make changes, additions, and improvements that will suit you. Sometimes when doing a renovation it too can also be a difficult process for getting money from a bank, but one loan that is tailored for this type of process is a 203k from FHA. Make sure you specifically ask about this type of loan and make sure your loan officer is very very familiar with this type of loan.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: