Which Mortgage Is Best for You?
September 28, 2022
The type of mortgage you choose ultimately comes down to your financial situation and the kind of home you’re willing to purchase. When looking to build or purchase new homes in Battleground WA, you’ll find that certain types of loans are typically best for your particular interest.
If you already own your land and are having a home built on it, then you could choose to go with just a construction loan. However, you may be required to pay off the full amount in a short period of time or convert it to a more typical mortgage, which is more affordable for most people.
However, whether you own the land or are purchasing the land and having a home built on it, your best option is a construction-to-permanent loan. This allows you to borrow the money needed for the purchase of the land, if necessary, as well as the cost of building your new home. Once construction is complete and you are able to move into the home, the loan is then converted into a permanent mortgage, the typical 15 or 30 year mortgage with fixed or variable interest rates. The big benefit with this type is the fact that you only have to pay closing costs once. This helps reduce the amount of money you will spend on fees, allowing you to afford the home you want or save some money in the process.
The construction-to-permanent option, like conventional mortgages, does have fairly high requirements to qualify for the loan and mortgage, especially as the cost is typically higher than purchasing an existing home. For people purchasing an existing home, who do not have a high credit score or don’t have the full downpayment amount, there is always an FHA loan. While you can qualify with a lower down payment and less stringent credit score requirements, you are more likely to end up with a higher interest rate, some upfront fees, and you will be required to pay for monthly mortgage insurance until you reach a certain percentage. If you have your heart set on building a new home, there are FHA construction-to-permanent loan options, as well.
Of course, if you’re a qualified military veteran, you can always consider the option of a VA construction loan, but you’ll still need a mortgage, which you can also go through the VA to qualify.
The construction-to-permanent loan is a solid choice thanks to the reduction in closing costs and multiple fees. Ultimately, you need to look at how much land you want to purchase, the kind of home you want to buy, and your financial situation. Fortunately, you can find plenty of online loan and mortgage calculators with current interest rates to help you determine if building or purchasing one of the new homes in Battleground WA is the right option for you. Don’t forget we also sell move-in ready new homes, which let you focus just on purchasing the home, allowing you to stick with a conventional mortgage if you prefer. Regardless of which type of home you want, contact us to learn more about the communities in which we built and the move-in ready homes we have available.Tags: homebuilder in battle ground wa, new homes battle ground washington, new homes battleground WA
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This post was written by Pacific Lifestyle Homes