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Here are some answers to some of the most commonly asked questions. Please take the time to review them we may be able to enlighten you in regard to some of the misconceptions about building a new home.


Q: Do I build or buy an existing home?

A: Many people who build a new home do so for a variety of reasons, some of those reasons are;
After looking at existing homes on the market they realize that what they want is not available, so building becomes the logical choice. This allows the buyer to choose the style, size, colors and specialty items they would like in their home.
  • Buyers today want little to No maintenance, energy efficient homes with modern amenities, such as master bedroom/master bathroom suites with whirlpool tubs & custom showers, fireplaces, theater rooms, custom chef's kitchens and outdoor living spaces.
  • Many people purchasing new construction do so because they feel it will be the best investment for their money

Q: When is the best time to build?

A: The cost of construction continues to go up every year, the phase "there is no time like the present" certainly holds true. The cost of materials also continues to rise every year, so very pricing is unlikely to diminish.

Q: Should I sell my home first?

A: You don't have to, If you have cash to build or can qualify for your new home mortgage without selling your present home. You could start construction and list your home. Hopefully by the time you have completed construction, your present home will be sold. (Normally financing is available without selling to those who have a very small mortgage on their present home, and have 20% or more to put down, so they can afford to start construction before selling.)

Q: Which comes first-the lot/site? Or the floor plan?

A: This is a question that varies depending on your needs. If you have a specific style of home or floor plan you are wanting to build, then you need to find a lot that will allow you to build that type of home on it. If you are looking for a certain area to build in and lots maybe limited, then you will need to determine what style or styles of homes that will best suit your lot. It's best to look at lots and at floor plans.
When looking for a lot for sale, it is in your best interest to have your builder look at the lot before you write an offer.

The lot that you have chosen may need fill or even removal of dirt that would add additional cost to you. Having your builder inspect the lot will help you determining the "True" cost of your lot. If you would like to write an offer and your builder hasn't had the opportunity to see it, you should write the offer contingent upon the builder's inspection, (ie. a "feasibility study") in insure that the property is able to be built on in the fashion that you desire and at a cost that is acceptable to your budget. Most builders offer free homes site evaluation that would include the positioning of your home on the lot, a review of the tree that can be retained or cleared and a review of the utilities available.

Q: How do prices vary from builder to builder?

A: It is fortunate that we have so many competent & skilled builders to choose from in our area that can build in a variety of subdivisions. So you not only have the choice of the floor plan you want, but also the Builder to build it! The saying, "What you get is what you pay for!" holds true in New Construction. The more you customize your home, the higher the price. Changes cost money because it cost the builder more to make them. Your builder knows what floor plans are livable and resalable. You should rely on your builder to help you when choosing a floor plan.

Comparing builders can sometimes be difficult because each builder has their own unique "Standard Features" & they can sometimes very greatly from builder to builder, although all builders must build to the same codes does not mean their homes are all build to the same specifications. So don't assume every builder provides the same exact features, allowances or specifications. It is necessary for you to review what you're really getting for the pricing that is listed. Do your "Due Diligence" as building a new home is one of the biggest purchases you will make.


Q: When should I apply for a new home loan?

A: Now!! Loans applications can be complex and require much documentation and take up to six weeks, so the sooner the better. By getting a lenders' "Pre-Approval" you can have any idea of what you can afford to put in your New home.

Q: Are lenders lending on New Construction?

A: Yes, most of the local & regional lenders are offering loan programs for New Construction. But not every bank offers that type of loan product it best to ask builders in the area you are looking to build who they would recommend. Programs are available in our area with as little as only 5% down, as wells as the more traditional products with 20% down thus needing NO mortgage insurance.

Q: Can I use my lender from up north?

A: It is best to use a lender that is familiar with building in the area you are considering construction your New Home, and that has a relationship with the builder you are considering, as it makes the process typically smoother for all parties.

Q: What can I afford to spend on my new Home?

A: Generally speaking most financial planners general rule of thumb is that one's mortgage payment shouldn't exceed 25% to 30% of your monthly income. Most lenders are looking for you to have a DTI (debt-to-income) ratio of below 43%.

Q: What Credit score do I need to have to obtain a financing to build my new home?

A: Again, minimum credit scores can vary by Lender as well as the loan program you are considering. The minimum credit scores required currently are ranging between 640 to 720. Again depending on the lender and the program you are using. Of course the better your credit score the better the interest rate you with be able to obtain.

Q: What are the current interest rates available for New Construction?

A: Current interest rates can vary, again depending on the lender as well as your credit score. But currently as of Feb 2016 rates are still trending near all-time lows, between 4% and 5% for 30 year fixed rate.

• For example 2: Based on information from our parade sponsor, Third Federal Savings & Loan a 30 year fixed rate loan for a buyer with a 700 credit score, the rate would be 4.54%, APR of 4.657% 20% Down Payment (80% loan-to-value) $250,000 purchase price/appraised value $200,000 Loan Amount At that current rate you can expect the Principle and Interest payment to be approximately: $ 1018.13 (w/out the taxes & Insurance).

Q: How much will I be required to put down on when building my New Home?

A: Required down payments vary by lender to lender & Loan Program to Program, as well as some banks do not offer Construction/Perm Loans. It is best to talk to your potential Builder to see what banks in their area they would recommend who offer this type of loan. But, currently the available lender programs can range from 5% to 30% down toward a Construction Loan.

Q: I own my lot outright (with no mortgage) will the banks give me "lot equity" towards my down payment requirement?

A: Yes, most Lenders will give you the current appraised value of your land as equity credit towards your down payment requirements. Therefore some Buyers find they do not have to bring any money to the table should they have sufficient equity in their land.

Q: How does a Construction Mortgage work?

A: A construction Mortgage may seem complicated to those of you who are not familiar with financing, and fortunately your lender will be doing most of the work for you, but here is a brief explanation of the process.

  • A construction loan is a short term loan obtained to finance the construction of a new home. It is almost always required where the buyer owns a lot or is purchasing a lot. In these cases the buyer will also be obtaining an end-loan or a permanent mortgage. This is usually done at the same time and in conjunction with the Construction loan (this is also known as a C/P loan or Construction Perm Loan.) Most lenders take care of both loans. You in fact are hiring the Builder to build your home. You own your home during construction vs. the Builder owning the home. You with the help for your Lender will pay the Builder for the work that is completed as the house is being built. This is done in the form of a "Draw". A draw is the money which has been paid out of your construction mortgage fund that has been set aside to be paid out solely for your new home's construction.
  • There are usually 5 draws made to a Builder through your lender during construction. When the builder completes a pre-determined percentage of construction he will notify your lender that a draw is needed. During this construction phase you as the buyer will be responsible to pay interest only (usually prime plus) on the monies paid out during the time of construction. At the time your house is completed and your builder request the final draw, after your home is completed and accepted and all funds have been disbursed, your loan will be converted typically to principle and interest payments. Your monthly payment will be determined by your interest rate, the total loan funds disbursed and the remaining loan term. In addition your monthly payment could include Private mortgage insurance (PMI) premium, as well as hazard insurance, and real estate taxes, (this is known as escrows.)

For more information on Construction Perm loans please speak with a construction Lender.
**Today's New Homes offer more benefits than ever before. Here's a quick list of the Top 10 reasons to buy a NEW HOME!**


  • Why settle for someone else's choices when you can select "your favorite" cabinets, counter tops, appliances, carpets, and flooring? While you're at it, you can choose a gorgeous bath and kitchen fixtures, lighting, and other options that you love. Your New Home will reflect "your style", NOT someone else's taste.


  • Want a master bedroom on the first floor? It's yours.
  • With massive his' and her's walk-in closets? Done!
  • Want high ceilings and a luxurious, resort style spa master bath?
  • Perhaps a sitting room with a fireplace in your owner's suite or French doors that open to your private patio or pool? Or Customized outdoor living area or cabana?
  • It's easy when you build it your way!

  • Your home can contain all the latest architectural benefits, like 9 ft, 10 ft, or cathedral ceilings, expansive closets and modern kitchens and baths.
  • You don't have to settle for a "good house" from the outside. But it does have nearly enough closets?
  • Are the ceilings are low? and bathrooms and a kitchen that are very outdated?

  • Most builders you will find offer up to (10) ten year warranty not to mention the manufacturer's warranties that are available on a new home. A used home likely has tired products that may soon need replacing. Your New Home and the products that comprise it are Brand New and under warranty.
  • What's the cost to replace a roof? ($7-10K)
  • Appliances? ($2-5K), Countertops? ($3K-10K)
  • Hot water heater? ($1000-$1500).
  • Those components in your New Home features the latest designs and building materials and should offer you years of comfort and enjoyment before ever needing replacement.

  • Today's New Homes are far more energy efficient than homes built just 5 years ago, much less vs. those that were built 10 or even 20 years ago.
  • It's game over, advantage NEW!
  • Why settle for drafty, energy-wasting single pane windows in a used home? Many new homes offer double pane windows. Special window coatings and inert gases between the layers of glass are often available, saving you even more energy and monies in both the heating and cooling seasons.

  • Today's new homes meet stringent energy standards and codes that were not in place in the past. They combine high-performance energy efficiency with state-of-the-art ventilation and air filtration. The result is year around, draft free comfort and higher indoor air quality.

  • New cars today are computer designed and computer equipped. That's why they perform much more reliably than a car that is 15 or 20 years old. Homes are the same way! Today's homes have open floor plans and high ceilings and reflect the way we live today. They are also made of cutting edge building products that require less care and maintenance. Another plus! The latest building systems and components are designed and engineered to work together.

  • Many modern items with new technology are included in new homes such as built-in dishwashers, refrigerators, microwaves, hard wired fire & carbon monoxide detectors, security, speakers, media/computer networking wiring and home automation systems. It's possible to replace some things such as all of the single-pane windows in a resale home with today's high-performance windows. It's also possible to add insulation to a used home. However it can be very expensive to replace dated appliances, cabinets and counter tops in a used home- and you still won't have the high ceilings you dream of on an older home. Not to mention you still would have older inferior worn systems (plumbing, wiring, & mechanical). All are reasons to build your new home your way to reflect the way you live today.

    9) SAFETY
  • State-of-the-art circuit breakers, electric garage door openers with infrared beams that stop if a tricycle or child is to near are a few this not found in older homes. Or a high-efficiency A/C that use the latest in environmentally friendly coolants. Cabinets, carpets, and paints that use fewer or NO-VOC (no volatile organic compounds), so that your family can breathe easier, in a more healthy home environment.

  • A used home was someone else's dream not yours. It reflects their choices and family memories. You may learn to love avocado-green appliances and you may be willing to scrub stained counter tops or grease incrusted ovens. But more people prefer that never lived in feel and prefer not to take on the previous owners problems.

After all, New Homes offer the latest in designs, style, comfort and quality.
They provide a care-free lifestyle so that you can enjoy your home not work on it.
Start shopping now! Visit our local home builders showcasing their designs, in this year's
Hernando Parade of Homes, featuring model homes in Hernando County.

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