Before you begin your new home search, you will need to be clear on mortgage loan options and there are many. If it is your first time buying or building a house, it is essential to know what type of mortgage product option suits your needs best and then to find a lender who can deliver that type of loan with the lowest interest rate possible. Below are the top new home mortgage loan types in 2022 for Marylanders.
Construction Loans and Significant Benefits
A construction loan is an option only when you are building a new home. A construction loan can be separate from your mortgage or be a construction-to-permanent loan that merges the two together. Ameri-Star Homes can help walk you through your best options. There are many benefits which include the following. You can lock your interest rate in for 12 months and when rates are rising this is a huge benefit. You can avoid two moves most times by not having to immediately sell your existing home while the new one is being built. Lastly, there are closing cost savings with Construction Loans.
Conventional loans fall into two categories: conforming and non-conforming. What makes a loan either of these types is how they align with standards set by the Federal Housing Finance Agency (FHFA.) Non-conforming mortgage loans apply to higher priced homes.
A fixed or adjustable-rate mortgage refers to the interest charged on top of the house price. If you are building your house, you may also have to add construction costs. A fixed-rate mortgage charges the same interest rate for the entirety of your loan payback period. If you catch the housing market when the interest rate is low, you can lock it in and not suffer from rising rates.
An adjustable-rate mortgage has a fixed interest rate for the first few years. After that, it is subject to change with the market. The interest rate will change once a year according to the market after an initial fixed rate period. This is a very effective means of enjoying a fixed rate for periods of 7, 10, or even 15 years. The average household moves every 7 to 10 years. You also have the option to refinance at any time leading up to the adjustment period. This can provide significant savings.
Government-insured loans include VA, FHA, and USDA loans. With government loans, you can still get a decent deal for your mortgage rate even if you have a lower credit score. You also don’t have to pay as high of a down payment. USDA loans do not require a down payment but do come with fees; VA loans are for active and veteran military and their families.
Let Ameri-Star Homes Build Your New Custom Home!
Ameri-Star Homes was built on the idea that a home is not complete until the homeowner is 100% satisfied. That’s right, completely satisfied homeowners. Whether you want a home built on one of our home sites or on your own land, count on the same high quality from Ameri-Star. We have set out to exceed all your expectations of integrity, affordability, and customer satisfaction. Build lasting memories for years to come with Ameri-Star Homes.