Understanding New Home Financing With Cristo Homes

It’s exciting to think about new home financing and purchasing, but taking these steps toward making your new home a reality can be quite intimidating, especially if you're more experienced with the process of purchasing an existing resale house.

At Cristo Homes, we understand this struggle better than anyone, so we’ve streamlined the new home financing process to be as straightforward and stress-free as possible. Our years of experience building homes for a variety of buyers have helped us see the process from an outsider’s perspective. So, read on for our comprehensive guide to help you navigate new home financing, ensuring a smooth journey from beginning to end.

Along the way, keep in mind that building a new home offers countless benefits, from low maintenance to modern design and smart features. While buying an existing home is a popular choice, building a new one can make new homeowners feel a true sense of attachment to and pride in their homes.

Simplifying the Home Buying Process

Here are the basic steps you’ll follow in new home financing with Cristo Homes:

  • Meet with a loan officer: We can connect you with our network of preferred lenders, who are well-versed in new home construction financing. This initial meeting is crucial, as it helps determine your budget and sets realistic expectations for your new home purchase. Providing clear communication during this step is necessary to ensure a smooth process.
  • Get pre-approved: Just as with buying an existing home, getting pre-approved for a mortgage is a vital step in purchasing a new construction house. This step involves providing financial information such as income, credit score and debt-to-income ratio to your lender. Pre-approval can strengthen your purchasing power and also provide a clear picture of what you can afford to build.
  • Securing the mortgage: After selecting your lender and getting pre-approved, the next step is securing the mortgage. At Cristo Homes, our preferred lenders often offer incentives, such as bonuses, to buyers who choose to work with them. This adds an extra incentive to the buying process and can also help take some financial stress off your mind.
  • The closing process: The closing process for a new construction home with Cristo Homes mirrors that of an existing home purchase. You'll review and sign necessary documents, finalize your mortgage details, receive the keys to your home and start the next chapter of your life.

Deposits, Timelines and Costs

Buyers often have questions about these important topics. Here’s what you should know:

  • Deposit requirements: One popular question posed by buyers involves the deposit requirements for a home. At Cristo Homes, we typically require a deposit to secure a property, which can vary based on the home's price and your financing plan. This deposit is a commitment that ensures your home will be built to your specifications and standards.

  • Financing timetable: Understanding the timeline for financing is not only crucial for a smooth process, but beneficial for your own understanding. In general, the process begins with getting pre-qualified for a mortgage, followed by placing a deposit. This sequence ensures you have a clear financial path before fully committing to the home's construction.

  • Fixed pricing: When you lock in your design package with Cristo Homes, the price is fixed. This unique feature means that once you've agreed on the design of your new home, the cost will not change, eliminating the stress often associated with new home construction projects.

Investment Value of New Home Construction

As we mentioned previously, a new construction house is a solid investment. Consider these factors:

  • Customization and modern features: New home construction processes offer the ability to customize according to your personal preferences. That space you’ve always dreamt of can become a reality when you choose to start from scratch. As an added bonus, new homes are often built with the latest technology and energy-efficient features in mind, which can lower your utility bills.

  • Warranty coverage and less maintenance: As an experienced builder in the Cincinnati/Dayton area, we provide warranties on our new homes, covering various aspects of the construction process. This warranty ensures that any issues arising within the construction period can be addressed and solved accordingly. Additionally, new, modern homes require less maintenance than older homes, which can save you time and money in the long run.

  • Appreciation potential: New construction homes are often built in up-and-coming communities. As these communities grow, property values typically increase, offering higher selling potential than other communities. Investing in a new home in an emerging area can be a wise financial decision.

New Home Financing: Popular Questions

Should I get a 15-year or 30-year mortgage?

Choosing between a 15-year and a 30-year mortgage depends on your unique financial situation, preferences and long-term goals. A 15-year mortgage typically has higher monthly payments but lower total interest costs, whereas a 30-year mortgage offers lower monthly payments but higher total interest costs. Working with an experienced loan officer can help you determine which option is best for you.

What is a typical down payment on a new construction home?

The typical down payment for a new construction home varies greatly depending on the lender, your financial profile, the buying market and unique features of the home itself. It often ranges from 5 to 20 percent of the purchase price, but our preferred lenders can provide specific details based on your circumstances.

What kinds of government-subsidized loans exist for home mortgages?

When considering purchasing a new home, you may want to look into government-subsidized loans. The two most common options are:

1. FHA (Federal Housing Administration) Loans

  • Down payment: As low as 3.5%.

  • Credit score requirement: Typically 580 or higher for the lowest down payment option; some lenders may require higher scores.

  • Mortgage insurance: Requires both upfront and annual mortgage insurance premiums (MIP).

  • Eligibility: Available to all buyers, including first-time and repeat buyers.

2. VA (Department of Veterans Affairs) Loans

  • Down payment: Often 0%.

  • Credit score requirement: No minimum credit score mandated by the VA; lenders may impose their own minimums.

  • Mortgage insurance: No mortgage insurance required, but a funding fee is applicable.

  • Eligibility: Limited to veterans, active-duty service members, and certain members of the National Guard and Reserves.

The Easy Path to a New House

At Cristo Homes, we understand how difficult it can be to make the first jump into buying a new construction home. That’s why we’ve made the financial process as straightforward as possible. It will feel just like the existing home purchase you may already be familiar with.

Whether you’re a first-time homebuyer or looking to invest in a new home, Cristo Homes is committed to helping you achieve your dream of homeownership with ease.

Some of our prospective buyers’ most popular questions can be more accurately answered during a one-on-one call or meeting with us. These conversations can help us better determine your unique situation, as well as your financial needs and preferences. For additional inquiries, consider asking:

  • What are the benefits of choosing a preferred lender with Cristo Homes?

  • How does the construction timeline impact the financing process?

  • What specific bonuses are offered when using Cristo Homes’ preferred lenders?

  • Can I make changes to my home design after construction has started, and how will this affect my financing?

If you are curious about these questions or have others about new home financing, don't hesitate to reach out to us for a quick phone call or email. We are ready to guide you every step of the way, ensuring that your journey to a top-quality home is as enjoyable as possible.