New Construction Mortgages And What You Need To Know | Waltham MA New Construction

New construction mortgages are not usually necessary when buying a home owned by a builder. Builders commonly cover the construction stage so that you can obtain a normal mortgage after completion of the house. Even though this makes your mortgage process easier, there are a few unique aspects of the mortgage process. This blog on new construction mortgages and what you need to know discusses this in some detail.

Paperwork Requested for New Construction Mortgages

You must always provide financial paperwork and a purchase and sales agreement for approval when applying for a mortgage. With new construction, you must also include a layout, construction specs, and all changes. Because there is no finished property to physically view, the construction specs are what they must rely on for underwriting.

Appraisals for New Construction

An appraisal is mandatory for all mortgages. Normally, an independent appraiser must visit a property prior to preparing the analysis that identifies the market value. Since this cannot be possible for new homes, the appraisal is performed in 2 steps. Up-front, the appraiser will use the building plans to predict the value of the property. Before closing, the appraiser will inspect the constructed home and confirm that it matches expectations. Only after this can a mortgage be granted approval to close.

New Construction Mortgage Approval Process

More requirements apply to new homes in a complex. The most important fact is the number of building phases and units sold thus far. Most mortgage rules have a certain percentage. This suggests that the complex is solid and likely to be completed.

New Construction Mortgages And What You Need To Know

After closing, the mortgage provisions are no different than any other type of purchase. Even though the initial process is a bit different for these homes, avoiding construction mortgages saves you time, energy and money. For more on new construction mortgages and what you need to know or related subjects, contact Jeanne Umbrello at Wal-Lex Realty.