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New Home Construction

New Home Construction
New Home Construction

When do we start the loan process for a new home construction home?

My husband and I are buying a new home. The house is currently under construction but it won’t be completely done until the Spring or Summer of next year. When should I start speaking with someone regarding a loan for the house?

My husband and I bought a newly constructed home out in Las Vegas, Nevada about a year ago. Before the home developer would even allow us to put an “earnest money deposit” down for the house, we had to get “prequalified” with a mortgage lender… this could be done anytime before your house is finished, with any mortgage lender/broker/bank.

Then about 3-6 months BEFORE the house was scheduled to be finished, we started to call around different mortgage lenders to shop around for best “interest rates and closing costs” terms … We found “IndyMac Bank” out in California to be the best lender at the time we called… I had heard of this company through my parents who have a mortgage with them… when my parents had a hard time finding lenders who could give them a “very good / low interest rate term” for their mortgage, it was IndyMac Bank that stepped up… and when it came time for my husband and I to close, IndyMac Bank was there for us… it was easy to “close” with them because everything was done over the mail, phone, or fax with NO complications! Also, CountryWide Bank was another lender that was very helpful and provided fair terms.

I highly recommend checking out different mortgage lender rates and no matter who you eventually choose for your lender, I recommend you “rate lock” with NO ADDED FEES (aka: No Lock Fees) approximately 3-6 months before closing… so long as the rates are affordable for you at the time.

Also, please be aware that most lenders do not want to give long length “rate locks” out… example: more than 45 days before your house is scheduled to be completed … when you get something that is around 3-6 months of a lock, they will want to impose some sort of crazy “rate lock fee”… don’t fall for this! Always try to negotiate a Rate Lock with No Fees! Otherwise, keep calling around! Many, many lenders are out there, and they all want your business! But the main point for you in shopping around NOW is to “rate lock” at a very low interest rate as possible, while being able to afford the monthly mortgage payments and terms!

I would also recommend you check out www.BankRate.com … this site can help you see what the going interest rates according to the mortgage terms you want (example: 30 year conventional fixed, 15 year conventional fixed, 5 year ARM, 3 year ARM, etc…), based upon your location … since mortgage rates usually change daily.

www.BankRate.com also provides good financial advice, as well as providing you with useful “financial calculators” (for example: they have mortgage calculators that can figure out how much you would end up paying for your house per month, given how much you plan to borrow/mortgage and how long you plan to take out the mortgage for (mortgage term).

Based upon the fact that your house will be done around Spring or Summer of 2007, I would start calling around the end of this month… because it makes me believe you may get better rates now that this year is ending and lots of companies will be willing to make last minute good deals to make up “quota” or boost their “end-of-year profits”, etc. For this same reason, it was also good to call at the end of the month, or the first week of the new month as opposed to the middle of a month to call for best rates… not always true, but from my personal experience, it seemed most likely.

Hope this helps… And I wish you a happy, speedy, and hassle-free closing!!!

New Ranch Style Home Construction Walkthrough Video for HPG-1800B-1

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