Purchasing a new construction home is an exciting opportunity, especially in a growing region like central North Carolina. Homes built by JSJ Builders offer modern designs, energy-efficient features, and the ability to customize finishes to fit your preferences. Financing a new construction home differs significantly from purchasing a pre-existing home, and navigating the mortgage maze can be tricky.

The teams at JSJ Builders and Liberty Ridge Lending have embarked on a joint venture to help make the mortgage maze a bit more manageable for our clients. The first step? Offering a clear understanding of available mortgage options.

_{Financing Your Home: New Construction vs Pre-Existing}

A mortgage for a newly built home is similar to a traditional home loan, but there are additional considerations, especially if your future home is in a new community and/or constructed by a custom builder. Liberty Ridge Lending offers the following mortgage options:

• Conventional Loans are the most common mortgage option for those purchasing a home and are backed by private lenders.
• Construction Loans are used when a homebuyer works with a custom home builder or purchases a home in a brand-new community.
• FHA Loans are ideal for buyers who may not have a large down payment.
• VA Loans provide a fantastic mortgage option for eligible military service members, veterans, and their families.

JSJ Builders has a variety of new construction plans for buyers ranging from beautiful homesites to fully completed, move-in-ready homes. Loan types will vary depending on what stage of construction your JSJ Builders’ home is in at the time of selection.

_{Conventional Loans are the most standard loans and follow guidelines set by Fannie Mae and Freddie Mac:}

• Down Payments on conventional loans typically require at least 5% of the home’s cost, but homebuyers can remove the need for private mortgage insurance by putting down 20%.
• Credit Scores on conventional loans typically require a minimum of 620. The higher the credit score, the better the interest rate.
• Fixed vs. Adjustable-Rate are both available for conventional loans. A fixed-rate loan offers stable payments throughout the life of the loan, while an adjustable-rate loan will start with lower initial payments before changing over time.

Conventional Loans are ideal for buyers with strong credit and sufficient down payments looking for flexible financing options on their new construction home.

_{Construction Loans finance the building process and come in two forms:}

• Construction-to-Permanent Loan: This loan covers the cost of construction and automatically converts into a traditional mortgage once the home is completed. This loan eliminates the need to secure a separate mortgage post-construction.
• Stand-Alone Construction Loan: This type of loan only covers the cost of building the home. Once construction is complete, the homebuyer will apply for a separate mortgage, allowing the opportunity to compare mortgage rates once their home is fully built.

Construction loans often require a higher credit score and larger down payment than traditional mortgages, as they do carry a higher risk for lenders. For those who may not have a large down payment or favorable credit score, the Federal Housing Administration offers an alternative.

_{FHA Loans are a great option as they have lower qualification requirements.}

• Down Payment requirements are as low as 3.5%.
• Credit Score minimums drop to 500 (with 10% down) or 580 (with 3.5% down).
• Mortgage Insurance on FHA loans is required.

JSJ Builders is hard at work in several communities convenient to Fort Bragg, making Liberty Ridge Lending’s Veterans Administration Loan a perfect match for our military homebuyers.

VA Loans make it easier for our military families to afford new construction homes without the burden of a large down payment or high interest rates. VA Loans are available for eligible military service members, veterans, and their families with unmatched benefits:

• No Down Payment Required
• No Private Mortgage Insurance (PMI)
• Competitive Interest Rates
• Lenient Credit Requirements

Understanding your mortgage options when purchasing a new construction home can increase your confidence in making an informed decision. The joint venture between JSJ Builders and Liberty Ridge Lending offers the perfect team to help you choose the perfect loan. We will help decipher the differences between each loan type and how each can be applied to your dream home. The central North Carolina housing market continues to thrive. Working with a knowledgeable lender and seasoned builder can help navigate the complexities of new construction financing, ensuring a successful home-buying experience.

Reach out to JSJ Builders or Liberty Ridge Lending today to find your brand-new forever home!