For many home buyers, one of the first questions they should be asking themselves is whether to purchase an existing home, a new home or have a home built. This is an important consideration, since the attributes and advantages or disadvantages of existing versus new can be considerable. In addition, there can be a fairly wide variance in the costs of these different types of housing. Although some comparisons are obvious--everything new and up-to-date versus much that is older and perhaps a bit dated--other parts of the comparison are frequently overlooked. Both a new home and an existing home can have their own distinct advantages and disadvantages, so it is important to explore your choices thoroughly so you don't find some rather unpleasant (and potentially expensive) surprises the day after moving in. Here are some specific tips to consider when making a choice between a new home and a re-sale. LAYOUT There definitely have been a number of changes in the last few years in the interior architecture of homes in the U.S. and Canada. New homes, for example, tend to have larger kitchens and family gathering areas than older homes, which are more likely to have more--and smaller--rooms. Much of the new home construction today features expansive kitchens flowing into--or in close proximity to--a large Great Room or Family Room. Homes built in the 1980s and earlier will frequently have a smaller kitchen with a separate family room, formal living room and formal dining room. Depending on your preferences and lifestyle, one of these layouts may be preferable to the other. Is the kitchen the focus of your family gathering? Then bigger, of course, is better. Do you prefer to have a "retreat" area away from household activity? An older design may be better suited to your preferences. LOCATION In general, new homes will be located further away from population centers than will be older homes-- which may be an advantage or disadvantage to you, depending on your point-of-view. If this is the case in your local area, don't forget to factor in longer commuting times to work, shopping and services when you make your comparisons. Although shopping, restaurants and services may eventually reach the new area, it is possible that your job location will never change. AMENITIES In the majority of cases, new homes will have more of the amenities that today's buyers have considered to be important--whirlpool tubs, skylights, "culinary grade" kitchen appliances and the like. Although many of these amenities can be added to existing homes, the cost can often be prohibitive. If you are concerned with the "newest and the best," it almost always is less expensive to build these amenities into a new home rather than try to retrofit an older one. THE COST Although a new home may cost you a bit more, your expenditures for repairs and maintenance should be far less for the first 5 or 10 years since many components of a home (heating systems, appliances, etc.) have life spans longer than that time frame. Many are also taking in to account the energy savings of today's modern building materials VS those used in the past.
What Does It Take?
One of the amazing things about American homes is that the huge majority of them are built using completely standardized building practices. One reason for this consistency is a set of uniform building codes that apply across the country. Another reason is cost -- the techniques used to build homes produce reliable housing quickly at a low cost (relatively speaking). If you ever watch any house being built, you will find that it goes through the following steps:
Grading and site preparation
Installation of windows and doors
Siding or stone
Bathroom and kitchen counters and cabinets
Carpet and flooring
Hookup to water main, or well drilling
Hookup to sewer or installation of a septic system
Many of these steps are performed by independent crews known as subcontractors. For example, the framing is generally done by one subcontractor specializing in framing, while the roofing is done by a completely different subcontractor specializing in roofing. Each subcontractor is an independent business. All of the subcontractors are coordinated by a builder who oversees the job and is responsible for completing the house on time and on budget.
Custom VS. Production Homes
With so many types of homes on the market, it is sometimes difficult to distinguish between a custom home and a production home. However, there are many distinctions between the two. Here’s a few useful tips to help you determine if the home you are looking at is a custom home or a production home, and more importantly, which one is right for you.
• Are typically one-of-a-kind homes designed for a specific client and for a particular location. • May be based on plans created by an architect or by a professional home designer. • Tend to be high-end containing many custom features.
• Are usually built in all price ranges. • Tend to be based on the use of stock blue prints that are not custom designed, but usually offer a variety of plan choices and options. • Are commonly built by large-volume builders.
Production homes can be customized to a certain level, depending on the production builder. They can be finished with granite counter tops stainless steel appliances, hardwood floors, Berber carpet and many other amenities. However, if you wish to hand select the granite for your kitchen counter tops design your kitchen cabinets down to the last drawer, or have a floor plan that isn't repeated throughout the neighborhood, then you are in the market for a custom home.
Are custom homes worth the extra time and money? That’s a question you will have to answer for yourself. Home building is a labor of love, and custom home buyers derive deep satisfaction from the experience of choosing the site and planning the design and finishes for their home exactly as they wish. Custom home owners believe the results are worth the effort and expense.
How Can I Finance It?
Once you have decided to build that new custom home you will have to decide how to pay for it. The two must common methods of finance that new home are the following unless you have a very rich relative.
A Construction to Perm Loan is exactly what it sounds like. It start off as a construction loan and then at the completion of the home it turns into a permanent home mortgage for you.
It is just one closing
Builder should give you a discount for finance the home.
If your builder qualifies for this type of loan it is an accepted way for most builders
It locks you into a rate
Closing cost are just a little more than a regular loan because of the necessity of an appraisers have to appraise plans and make inspection very time they is a draw
You will have to start making payment from the first time you draw on the loan.
You will need 20% as a down payment.
2. Builder finance construction with an end loan.
Your closing cost are a little less
You are not making payments on the money borrowed directly,
Will take less down payment
Not many builder are able to do this
Will cost you more because home builder taking bigger risk
Builder will pass interest cost to you through his end sale price.
I hope this helps you to understand the financing part of building new construction home.