my explanation building or Buying a New Home?
If you are thinking of buying or building a brand spanking new home, you're in luck because this narrative was created for you! In fact, many of my clients have carefully the store has become pretty well picked over and the majority of what's left is either over-priced or junk. Recently I've been fielding a lot of questions about buying brand new building or building a new home, so I've decided to help you by outlining the process.
building or Buying a New Home?
Step 1: Get pre-approved for your building loan or to purchase the newly built home once it's constructed by the builder. This is especially important for new construction! If you are buying a lot and building a home, the building loan underwriting process is much tougher than if you are buying an already built new home. This often requires more down payment, best prestige and lower debt to wage ratios. I've had many clients qualify to buy an existing home but do not qualify for a building loan.
If you are using a constructor like Gough or Wright Homes to build your home for you (both do great institution building in Salt Lake and Utah County) then you just need what's called take out financing to buy the property from the constructor when building is complete. You truly have to be carefully pre-approved with this coming because you will be giving the constructor non-refundable building deposits and if you can't close on the take out financing then you will lose that money (insert swear word here). It's important that your mortgage team not only look at the last two years of your prestige and wage but we also try to inventory for any changes in interest rate, etc. Over the next 90 to 180 days as your home is being constructed. We will make sure your loan is fully underwritten and stylish prior to giving any non-refundable funds to the builder.
Step 2: uncover a community and lot to build your dream home on. Once your mortgage (construction or take out financing) is stylish then you know how much you're comfortable and capable borrowing and can pick a lot.
Tip: You truly want an specialist Realtor that specializes in land and new building to help you with this. If you've not built many homes before there is a Ton that you do not know. Naturally put, hire a land specialist and allow them to elucidate all the mistakes they've seen past clients make. You can't un-build it after it's built...
Step 3: Build your home! This is a normal timeline and guide to the key steps that occur during the course of construction.
Building Process:
Customize house plan w/ builder
Color Orientation- Coordinator & suppliers w/ options pricing (1-2 weeks)
Pre building Meeting (3-4 weeks)
Color selection Meeting- Finalize decisions (6-7 Weeks)
Start Dig (7-8 weeks)
Electrical/ Flat-work Meeting- Discuss location of lights, plugs, options & concrete (11-12 weeks)
Walk through Meeting- Confirm upgrades are in place, create punch list of missing items (18-20 weeks)
Closing & Completion of Home- Time will depend on size & scope of home (19-21 weeks)
Step 4: Close on your home and move in (picture yourself in home nirvana here!) If you've done a building loan in your name then you already own the home and you just move in. If you've chosen to have the constructor form the home for you, then this is when you get your take out loan and truly purchase the home. Our goal is to have your loan fulfilled, the same day the city issues the Certificate of Occupancy so you can move in immediately.
So that's it, you are now more educated than most population who have done this process some times over. Congratulations!
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