If you want a new build home, consider these financial factors
Some people like older homes while others prefer newer construction. Luxury homes, single-family homes, and all other types can lead to a variety of surprises and hidden repairs, but a new home often means you can avoid a lot of those costs (at least initially), and the idea of ââgetting a new house with the ability to design specific houses can be appealing.
If you are thinking of building a new home, you are in good company. According to United States Census Bureau, nearly 1.7 million new home construction projects were launched in March 2021. Like any major financial decision, getting a new home construction has its pros and cons.
HOW MUCH MONEY DO YOU REALLY NEED TO BUY A HOME?
One of the main factors to consider in the home buying process is the impact of a new home on your finances. It doesn’t matter if you live in North Carolina, San Diego, Kansas City, or Puerto Rico, here’s what you need to know.
When considering your budget, you can go to Credible to use an online mortgage calculator to determine your potential monthly mortgage payments.
Benefits of a new construction home
1. Brand new residence
One of the biggest benefits of getting a new build home is that you and your family will be the first to live in it. Your home will be ready to move in with new flooring, systems and accessories. You won’t have to worry about what the last owner did to the house or repaint the walls, change floor plans or knock out walls, for that matter.
2. Ability to choose your own features and settings
Most new home construction projects allow you to customize certain features of your home so that you get exactly what you envisioned. Want high ceilings? A specific color for your window shutters? In most cases, you will be able to customize the interior and exterior of your home within the confines of your contractor when designing your home. It’s also possible to work with a design center and pick some appliances and features that fit your budget versus lavish upgrades that could jack up the cost of building your new home.
3. Save on repairs and maintenance from the start
Another benefit of building a new home is that you can usually save a lot of money on repairs, maintenance, and other types of home improvement in the first few years. the U.S. Housing Survey found that for homes less than four years old, 73% of homeowners spent less than $ 25 per month on routine maintenance costs. Plus, many new construction homes come with a 12-month builder’s warranty, so in the rare event that something breaks or needs to be replaced, you’ll have help covering those costs.
The disadvantages of a new construction house
1. Potential to be more expensive
Building a new construction home can cost more than buying a used home, especially if you are looking to relocate to a big city. Zillow estimates that a new real estate construction cost could total 20% more on average.
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Most new home prices are based on a starting rate, but will generally increase once you add custom features and accessories, so it’s important to have a larger budget or a flexible price range just in case. or. You can visit Credible to get prequalified for a mortgage and see how much you can borrow and with the best interest rates currently available.
2. Construction delays
Another potential downside is that you might be working with a home builder who takes longer to complete your home. Every construction process is different and some contractors may work slower or encounter inevitable delays that could disrupt your schedule and daily plans. If you are planning to move into your home on a certain day or have a quick move, but realize that it may not be ready for a month or two, you may need to make alternative housing arrangements. or make other adjustments.
3. Expensive upgrades
When it comes to building a custom home, you might have a few options for exterior and interior features, but also be limited to those options. Be sure to ask for customizations information beforehand and see what the builder recommends in terms of budget for it. Landscaping is another cost that you will need to consider because you will be starting from a blank slate with your home. New landscaping installation fresh could range from $ 3,000 to $ 15,000.
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4. Less room for negotiation
Homebuyers generally have less leeway in negotiating with a new construction home. With a used home, the price is usually set based on the housing market rate and the owner, but there is still room to negotiate especially if you need to do some work on the property. Builders are also less likely to lower the base price of homes.
If you are trying to find the right mortgage rate, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and view pre-qualified mortgage rates in minutes.
Should You Buy a New Construction Home?
When you buy a new build home – whether in San Antonio, South Carolina, Los Angeles, or West Virginia, you have the flexibility to make more decisions about creating the home of your dreams. However, this can come at a cost. The starting price the builder provides you with will likely increase in the process as you add more customizations.
You’ll still need to qualify for a home loan, make a down payment, and pay insurance and closing costs, so keep that in mind. Weigh the pros and cons carefully, then assess your finances and start by pre-qualifying for a mortgage for free with Credible.
IF YOU WANT TO BUY A LAND, CONSIDER THESE FACTORS
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