Finding a home is one of the biggest decisions most consumers will make in their lifetime. When presented with two choices – buying an existing home or building a new home, how do you weigh the options? With the increasingly low inventory of existing homes, new construction is becoming a more enticing option for buyers.
1) A Floor Plan to Fit Your Lifestyle. Need a large kitchen with a center island to entertain guests? Maybe you want a first floor master suite in preparation for the future as you age. When building, you get to design a floor plan that fits your lifestyle. Today, homes are trending toward more open-concept layouts. Many existing homes have more restricted space inside or a closed layout. You will also have the ability to customize by selecting everything inside and out: roofing, siding, paint colors, cabinetry, flooring, counter tops; the list goes on and on.
2) Energy Savings. New construction uses the latest energy efficient insulation, doors & windows, heating and cooling systems and appliances. This means you could save hundreds of dollars a year in utility bills.
3) Fewer Home Owner Headaches. If you purchase an older home, there are bound to be repairs. With a new build, your home will not require major repairs for many years. Routine maintenance is required to keep any home in good working condition, but you will not find the major home owner headaches, such as a needing to replace a roof or furnace.
4) Safety, Built Right In. New homes go through rigorous inspections after each phase of the building process: electrical and plumbing rough-ins, insulation and a final certificate of occupancy from the town to make sure all components are up to code. You can rest assured that your new home is up to the highest safety standards.
5) You Don’t Need a Big Down Payment. Finally, the most common misconception is that buyers need to have 20% for a down payment. This is not always the case. A small handful of construction companies offer no-construction loan financing, meaning you do not pay interest or make payments throughout the build. The only payment due upfront is the down payment your loan program requires. For example, if you were using an FHA Loan on a new construction purchase of $275,000, your down payment would be approximately $9,625 or 3.5% which is the typical requirement for an FHA Loan. Also, if you already own land, you can use your land as your new construction down payment. You will need to budget for other costs, such as a plan deposit (which is typically applied to the cost of your construction contract), appraisal fees, possible change orders and closing costs. *Please note this is just an example. Consult a lender for more information on financing and down payments.