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Closing costs can also vary depending on your lender as well as location. But here are some typical closing costs: (box at right)
Other pre-pays will include the first month's interest, hazard insurance, private mortgage insurance, and taxes.
Before you begin your search for a new home you should meet with a lender and determine what you qualify for and get a pre-approval letter.
There are numerous lenders available to finance your new home. In many cases, mortgage brokers are very helpful because they have access to many lenders and can get good programs. However you may deal directly with a lender. |
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Origination fee: |
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0%-1.5% |
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Buy-down points: |
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1%-5% |
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Appraisal: |
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$350-$450 |
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Credit Report: |
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$25-$50 |
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Flood certification: |
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$10-$25 |
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Survey (<1 acre): |
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$300-$500 |
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Attorney fee: |
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$400-$500 |
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Title search: |
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$75-$150 |
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Title insurance: |
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$1.50 per $1,000 |
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Record title: |
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$45-$80 |
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Pest inspection: |
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$100+ |
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Home inspection: |
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$150+ |
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Copies and courier: |
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$100+ | |
Since it is new construction, you will have to begin with a construction loan and later change it into a permanent mortgage. You will want to select a product that allows a one-time closing. This will help you to reduce closing expenses and simplify your home building experience. Usually your construction loan will cover all construction expenses as well as your land. They are usually capped at 12 months and payments are interest only. Once construction is completed, your loan is converted into a traditional mortgage where you will either have a fixed interest rate or an adjustable rate for up to 30 years. The amount you will need to put down on your new home will vary also, from 0% to 20%. There are many special programs out there for veterans, first time homebuyers, below average credit, and many more. Your mortgage expert will be able to consult you on what product is best for your situation.
There are two main factors that lenders will look at when qualifying you for a loan, your debt to income ratio and your credit. However, there are other things that might be considered such as assets, work tenure, education, and others. Your debt to income ration is calculated by looking at how much you make and how much debt you have (mortgages, car/boat loans, personal loans, credit cards, lines of credit, etc). This calculation does not look at utilities, gas, food and other living expenses. Your credit will be pulled from the three main credit bureaus, Equifax, Transunion, and Experian. They will show your credit history and calculate your score. Your credit will also be a main factor in determining how much you may have to put down as well as your interest rate. Top credit scores are needed to get the best interest rates.
