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So you’ve finally found the perfect plot of land and are ready to start building your dream home. Congratulations! This is a huge accomplishment. But before you can begin construction with Nashville, TN home builders, you need to figure out how you will finance your new construction home.
In this blog post, we’ll walk you through the process step-by-step so that you can make informed decisions about financing your new home.
Obtain Your Credit Information
The first step in financing your new construction home with Nashville, TN home builders like The Jones Company is to obtain your credit information. This includes your personal credit score and credit history. You can get this information for free from several sources online. Knowing this information is essential because it will affect the interest rate you’re offered on your mortgage.
Determine Just How Much You Can Afford
Once you have your credit information, you’ll need to determine how much you can afford to pay Nashville, TN home builders for your new home. This includes not only the cost of the land and the construction itself but also the cost of furnishings, appliances, and any other incidentals you might need once your home is finished. According to experts, a good rule of thumb is to keep your monthly mortgage payment at or below 28% of your gross monthly income.
The Different Types Of Mortgages For New Construction Homes
The next step is to familiarize yourself with the different kinds of available mortgages for new construction homes. There are two main types of mortgages:
- fixed-rate
- adjustable-rate
Fixed-rate mortgages are characterized by an interest rate that stays the same for the loan’s life, while adjustable-rate mortgages have an interest rate that can change over time. Adjustable-rate mortgages usually start with a lower interest rate than fixed-rate mortgages, but they can increase over time if market conditions warrant it.
How To Compare Interest Rates And Find The Best Deal
Once you know what type of mortgage you’re looking for, it’s time to start shopping for the best deal. When comparing interest rates, be sure to compare apples to apples. That means comparing rates that are offered for the same type of loan (fixed-rate vs. adjustable-rate), with the same terms (15-year loan vs. 30-year loan), and with the same points (0 points vs. 1 point). Once you’ve found a few competitive offers, it’s time to negotiate.
The Importance Of A Good Credit Score
As mentioned above, credit score will affect the interest rate you’re offered on your mortgage. But what exactly is a credit score? A credit score is a unique three-digit number lenders use to evaluate your creditworthiness. The higher your credit score, the lower the interest rate you’ll be offered on a loan.
What To Do If You Have Questions About Financing
If you have questions about financing or feel overwhelmed during this process, contact a professional for help. Many qualified mortgage brokers and loan officers would be happy to answer any questions you may have and help guide you through this process.
The Financing Process With Nashville, TN Home Builders: Wrap Up
We hope this article has given you a better understanding of how to finance your new construction home with Nashville, TN home builders. Remember, if you have questions or feel overwhelmed during this process, contact a professional for help. Thanks for reading.
