Home Financing at the Jersey Shore is somewhat different than funding the purchase of an existing home. Both can require a deposit and closing costs. MAC Builders strives to make building a brand new home affordable and simple. We have also been designated by Wells Fargo as an approved home builder in New Jersey, which means we can help you secure Home Financing at the Jersey Shore you may require. In this post we will attempt to describe the three largest costs involved in building a brand new home.

Down Payment

Banks and lenders never fund 100% of a home’s value. For example, someone purchasing a $200,000 home cannot borrow the entire sale price. Banks and lenders want to see some amount of money up front before securing a mortgage. The sum of money you’ll be able to manage on your down payment will determine the type of mortgage. A conventional loan can be secured by borrowers with the regular 20% down payment. Conventional loans don’t require borrowers to pay high-priced mortgage insurance premiums. The other alternative is an FHA loan, which only needs a 3% down payment. FHA loans are secured by the government and requires borrowers to pay monthly mortgage insurance premiums.

Construction Loan

A couple similarities do exist, while every building loan differs. A building loan is a short term loan required to finance the construction of a new home. Most home builders don’t start constructing a brand new house without this in place first. MAC Builders, in partnership with Wells Fargo is in a position to help you obtain the financing required for your new home at the Jersey Shore. 

Closing Prices

Close, sometimes referred to as settlement, is the date you finish your home loan and receive the keys to the home. Buyers usually are in charge of paying prices and any additional fees billed by the lender and other third parties on this date. In addition, you pay your down payment at closing at the same time. Closing prices are the amount of these fees and charges.

Closing prices frequently include credit checks, loan origination and processing fees, attorney’s fees, home inspections and assessments, and points (up front fees paid to get a lower interest on a mortgage). On average, closing costs range just over 2.2% of a home’s purchase price. For instance, closing costs on a $200,000 house could add up to more or $4,400 so it is good to plan for this in advance.

Interest rates are still low and it is a great time for anyone looking to purchase a home at the Jersey Shore!

Posted On: May 17, 2014