Ready to Build Your Dream House?
Are you REALLY Ready to Build your Dream House?
Engaging with a builder for the purpose of having a new custom or semi-custom home built is very different from purchasing an already built new home from a “spec” builder, from a subdivision builder, or buying a previously owned existing home through a Realtor or from a private Seller. For a start, buying an already fully completed new or previously owned house enables a qualified buyer to obtain a purchase mortgage on terms that may involve as little as a ZERO down or a very low down-payment depending on the buyer’s credit, income and debt situation. In addition, buyers of existing homes can usually get qualified for a purchase mortgage with a mid-FICO credit score in the low 600s. However, there are a fast growing number of folks who simply do NOT want to buy a “look alike” tract home built on a postage-stamp sized lot that is maybe only 15’ or less distance from a neighboring house and neither do they want to buy a resale house that was someone else’s dream!
Since you have decided to explore our website it would seem that your preference is to have a new home customized to meet your dream and built on a lot or land that you already own or on a lot that you wish to purchase and combine with a construction loan.
Our commitment to all of our prospective clients is to counsel and guide their home selection decisions in a way that meets their available budget. From time-to-time we meet a client who has the ability to pay full cash for their new home construction and who advises us exactly what their project budget is. That is an exception because the majority of our prospective clients will need to secure an approval from a Bank or from a Credit Union for a construction loan. The requirements for a construction loan approval are very different as compared with a purchase mortgage. In most cases, you (and any co-borrower) will need to have a minimum mid FICO score of 660 and a debt-to-income ratio inclusive of the cost of the new mortgage that does not exceed 42% of your reportable gross monthly income.
There are two separate loan components involved: 1) The short-term Construction loan which is usually funded directly from the Lender’s in-house resources and 2) What is called the “Take Out” long term mortgage which is the same as a purchase mortgage and pays off the short-term Construction loan. Even though there are two entirely separate loans involved, most Bank and Credit Unions will only charge you for one set of closing fees. 99.99% of Lenders offering Construction loans will require a down-payment to reduce their risk as well as loan closing costs. In other words you need to have some “skin in the game”.
Most of the “Big Box” Nationally represented Banks will offer 80% of construction cost (inclusive of land/lot). Many of the Regional Banks offer 85% – 90% construction financing, and a few smaller in-State Credit Unions many offer up to 95% construction financing to very well qualified borrowers.
Call or email to schedule a meeting to discuss how best CMSSC can transform your dream into reality! Bob Corrigan 843-364-5413 or email email@example.com