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Fundamentally they are not. But speak with a loan officer for more details.
Tony and Suzanne Marri...
Sandy Padula and Norm...
What Nina Hollander said.
In my experience, they are not.
No difference, unless you are asking about a construction loan.
Nina Hollander nailed this one!
abby tiscareno - new construction takes longer time to complete - hence the different structure.
C to P mortgage? They divvy out the money in stages.
construction loans are very different from end loans..... buyers of new construction just apply for the end loan....the developer/builder carries the construction loan and those costs are built into the sale price of the home....
Debe Maxwell, CRS
Please read Chapter 5, Financing
Debe Maxwell, CRS
Are you talking Construction Loan. Normally a construction loan works by disbursement of funds during the completion of the home,referred to as Draws. Each draw is done after a phase in completed eg: Foundation, Frame,Rough In's,etc. During the construction phase the rate will be Interest Only and converted to a fixed mortgage after completion. Most lenders will also charge 1 point up front. Normally this would be a 2 x close. I have done many in my 46 years.
If you are getting a custom home built, your construction loan may require you to start paying money during the actual construction. This is done in "draws" as the construction progresses.
If you a buying from a tract builder, it is just like a regular mortgage that is in place when the property is complete. The only difference is that the construction loan will have more closing costs because the builder passes every penny they can onto the buyer and some costs which are typically seller cost may now be on the buyers side.
The builder may also require that you use their lender and title company before they will consider paying some of the buyers closing costs. This is very controversial and probably a RESPA violation.
Your trusted mortgage loan officer will explain the many available products.
abby tiscareno Already, several good answers.
new homes take longer to build
Others have answerd.
I will leave that to a loan person.
All the best to you with your studies Abby.
Barbara Todaro has your answer.
I know there is a difference in loan payouts. I'm sure you will get very detailed answers from experienced agents or mortgage lenders.
Hi Abby, as others have said, it depends on if you are differentiating between a construction loan or just a loan pyrchasing a new construction home that is pre-built. Which one are you asking about?
There are some good answers below, especially from Joe D'Agostino . You will get also a good answer from a reputable lender
Vastly different until they ultimately Close from construction-to-perm. During the construction aspect of the loan, the lender released various percentage points of the loan as each major part of the building process is completed and inspected by the bank's inspector.
Each time a fragment of the funds are released, the borrower pays an increased amount. During the construction part of the process, the buyer only pays interest.
At the end of construction, county inspections and final Certificate of Occupancy isusance, a new permanent loan is obtained by the buyer - just like any other mortgage loan.
Joe D'Agostino gave you a great answer. A
Mortgages for new builds usually require early issue title insurance if the home was finaled within the lien period for mechanics liens. The other responses covered the differences between new construction mortages to be paid for custom homes and traditional mortgages.
Depends on the type of loan you are taking out on new construction..need to speak with a lender. Mike & Eve Alexander are right if its a Construction Loan then just as they have described.
It depends, if buying a new home already up from a builder then no. If buying land and hiring a builder to build out, then yes.
- Paid out in draws to construct house
New homes mortgages work pretty much the same as existing homes. Both have to go through an appraisal process and have the title checked. Rates are no different for one or the other.
I think Joe D'Agostino gave you a great answer.
abby tiscareno Joe D'Agostino and Mike & Eve Alexander have your answer.
Terms and conditions.
Essenstially the same but their may be different options on locks, but all extended locks cost someone money.
If you are getting end loan, its not different.