Plenty of Options for Financing Your New Home
3/8/2013
Find the fun in financing
Programs and incentives can help pave the way to a new home. It’s not uncommon to go to several stores to get the best deals on groceries, or compare prices online before buying that birthday gift. So, why not compare and contrast home mortgage and financing options when buying or building a new home?
The U.S. Department of Housing and Urban Development suggests thinking of home loans as a product — comparing prices and terms — just like shopping for electronics or a car. Shopping, comparing and negotiating, according to HUD, is the best way to get the best deal.
And there is good news for those wanting to build their dream home. At the end of last year the Federal Reserve announced its efforts to keep interest rates low to make loans for big-ticket items — like home purchases — more attainable.
Just like the consumer working to find the best option, the rocky economy and bank crisis nudged homebuilders to consider new approaches, get creative and take advantage of additional resources to help get buyers the financing they need to purchase their homes.
Builders work closely with financing companies familiar with their products and processes and are available to assist homebuyers through each step. Some homebuilders even offer easy to use tools to help in the shopping phase. Hartz Homes, which has a variety of single-family home, townhome and condominium communities in suburban Chicago, offers an online financing section to help customers calculate mortgage payments, how much income is needed to qualify for a home, or to compare the cost of renting against owning a home.
Preferred for a reason
While doing comparison shopping, the easiest first stop is with the chosen homebuilder. Most builders work with preferred lenders. While that doesn’t necessarily mean you have to go with their people, Rachel Randall, sales and marketing director for Phillippe Builders, says they typically know the ins and outs of financing — especially as it relates to new construction.
For example, she says, they aren’t locking in loan rates that will expire in 10 days because the lender knows the timeline is more drawn out for new construction. Instead these lenders are able to lock in at six months.
When shopping around, make sure to compare apples to apples — double checking each lender is providing information such as percentage rates and fees as well as taking into account the type of loans that may be needed when purchasing new construction. There are several types of mortgage loans for new construction including a straight sale from the builder that would allow a standard mortgage from a lender of the purchaser’s choice, as well as an interim construction financing or a construction conversion mortgage, which is used when the buyer is looking for purchase or refinance options to replace the interim construction loan they secured to have a new home built, according to Freddie Mac.
Zeman Homes, which offers manufactured homes in 35 communities including many in Illinois, started its own finance company in 1999 when even customers with good credit were struggling to get loans. Six years ago they also began a lease program to give additional options including lease to own, says CEO Dee Pizer. “We’ve tried to stay with the times and try to stay current developing programs that help customers,” she says.
Affordability
Some may believe a newly constructed home is out of their reach financially, but researching options and locations may turn up more pleasant surprises than expected. Phillippe Builders offers two affordable area communities including Hunter’s Chase in Beecher and Spring Run in Lowell, Ind. Both include single-family homes as well as no-maintenance villas. The homes, ranging from the $140,000s for the villas to the $180,000s for single-family homes, are more affordable based on their more rural location as well as the community structure. Both are fully developed master planned communities where all the infrastructure and amenities are built ahead of the homes, which passes savings on to the buyer, Randall says.
“You’re not paying a retail price for a lot,” she says.
Zeman Homes offers manufactured homes from one bedroom and bath starting at $27,900 to their “bread and butter” model of three bedrooms and two bathrooms ranging from $31,500 to $34,900. Because the homes are purchased and manufactured at a bulk rate the company is able to pass savings on to the customer.
In addition, there is the opportunity for a down payment as low as 5 percent for Zeman Homes, depending on the person’s financial situation — which could be as low as $1,500 to $2,000, Pizer says.
While the full service loans still have to go through all the required steps, Pizer says if an existing home is available a homeowner could close on their new home in 10 days, sometimes less, because there isn’t the need for a title search on a manufactured home.
Outside the box
While shopping for a builder as well as loans it helps to look at what programs and incentives are available to help make the purchase a reality. Because of the rural locations, both Phillippe Builders’ communities qualify to be part of the U.S. Department of Agriculture Rural Development Single Family Housing Guaranteed Loan Program.
The concept of the government program is 100 percent financing on a 30-year mortgage with no money down, Randall says. The program is offered in select rural areas to promote development and provide affordable housing options and is not limited to first time homebuyers.
Not having to come up with a down payment can help young people trying to get their foot in the door all the way through to older adults trying to save for retirement. 
It can even mean money still available to put toward furniture and home electronics.
Homebuilders also have been known to pay for closing costs, offer flat screen TVs or throw in some upgrades. The incentives, used in advertisements, catch the buyer’s interest and sometimes offer one more thing to help make the sale a done deal.
Pizer says Zeman Homes usually runs a promotion once every quarter. They are gearing up for Swing into Savings, a baseball themed scratch off that will give buyers up to $2,000 off the price of a home. In the past they have given away washers and dryers, air conditioners and a room full of furniture, Pizer says.
“We all like feeling like we got something extra for our money,” she says. “If you are spending less out of your pocket there is more to spend on your new home.”
3/8/2013
Find the fun in financing
Programs and incentives can help pave the way to a new home. It’s not uncommon to go to several stores to get the best deals on groceries, or compare prices online before buying that birthday gift. So, why not compare and contrast home mortgage and financing options when buying or building a new home?
The U.S. Department of Housing and Urban Development suggests thinking of home loans as a product — comparing prices and terms — just like shopping for electronics or a car. Shopping, comparing and negotiating, according to HUD, is the best way to get the best deal.
And there is good news for those wanting to build their dream home. At the end of last year the Federal Reserve announced its efforts to keep interest rates low to make loans for big-ticket items — like home purchases — more attainable.
Just like the consumer working to find the best option, the rocky economy and bank crisis nudged homebuilders to consider new approaches, get creative and take advantage of additional resources to help get buyers the financing they need to purchase their homes.
Builders work closely with financing companies familiar with their products and processes and are available to assist homebuyers through each step. Some homebuilders even offer easy to use tools to help in the shopping phase. Hartz Homes, which has a variety of single-family home, townhome and condominium communities in suburban Chicago, offers an online financing section to help customers calculate mortgage payments, how much income is needed to qualify for a home, or to compare the cost of renting against owning a home.
Preferred for a reason
While doing comparison shopping, the easiest first stop is with the chosen homebuilder. Most builders work with preferred lenders. While that doesn’t necessarily mean you have to go with their people, Rachel Randall, sales and marketing director for Phillippe Builders, says they typically know the ins and outs of financing — especially as it relates to new construction.
For example, she says, they aren’t locking in loan rates that will expire in 10 days because the lender knows the timeline is more drawn out for new construction. Instead these lenders are able to lock in at six months.
When shopping around, make sure to compare apples to apples — double checking each lender is providing information such as percentage rates and fees as well as taking into account the type of loans that may be needed when purchasing new construction. There are several types of mortgage loans for new construction including a straight sale from the builder that would allow a standard mortgage from a lender of the purchaser’s choice, as well as an interim construction financing or a construction conversion mortgage, which is used when the buyer is looking for purchase or refinance options to replace the interim construction loan they secured to have a new home built, according to Freddie Mac.
Zeman Homes, which offers manufactured homes in 35 communities including many in Illinois, started its own finance company in 1999 when even customers with good credit were struggling to get loans. Six years ago they also began a lease program to give additional options including lease to own, says CEO Dee Pizer. “We’ve tried to stay with the times and try to stay current developing programs that help customers,” she says.
Affordability
Some may believe a newly constructed home is out of their reach financially, but researching options and locations may turn up more pleasant surprises than expected. Phillippe Builders offers two affordable area communities including Hunter’s Chase in Beecher and Spring Run in Lowell, Ind. Both include single-family homes as well as no-maintenance villas. The homes, ranging from the $140,000s for the villas to the $180,000s for single-family homes, are more affordable based on their more rural location as well as the community structure. Both are fully developed master planned communities where all the infrastructure and amenities are built ahead of the homes, which passes savings on to the buyer, Randall says.
“You’re not paying a retail price for a lot,” she says.
Zeman Homes offers manufactured homes from one bedroom and bath starting at $27,900 to their “bread and butter” model of three bedrooms and two bathrooms ranging from $31,500 to $34,900. Because the homes are purchased and manufactured at a bulk rate the company is able to pass savings on to the customer.
In addition, there is the opportunity for a down payment as low as 5 percent for Zeman Homes, depending on the person’s financial situation — which could be as low as $1,500 to $2,000, Pizer says.
While the full service loans still have to go through all the required steps, Pizer says if an existing home is available a homeowner could close on their new home in 10 days, sometimes less, because there isn’t the need for a title search on a manufactured home.
Outside the box
While shopping for a builder as well as loans it helps to look at what programs and incentives are available to help make the purchase a reality. Because of the rural locations, both Phillippe Builders’ communities qualify to be part of the U.S. Department of Agriculture Rural Development Single Family Housing Guaranteed Loan Program.
The concept of the government program is 100 percent financing on a 30-year mortgage with no money down, Randall says. The program is offered in select rural areas to promote development and provide affordable housing options and is not limited to first time homebuyers.
Not having to come up with a down payment can help young people trying to get their foot in the door all the way through to older adults trying to save for retirement. It can even mean money still available to put toward furniture and home electronics.
Homebuilders also have been known to pay for closing costs, offer flat screen TVs or throw in some upgrades. The incentives, used in advertisements, catch the buyer’s interest and sometimes offer one more thing to help make the sale a done deal.
Pizer says Zeman Homes usually runs a promotion once every quarter. They are gearing up for Swing into Savings, a baseball themed scratch off that will give buyers up to $2,000 off the price of a home. In the past they have given away washers and dryers, air conditioners and a room full of furniture, Pizer says.
“We all like feeling like we got something extra for our money,” she says. “If you are spending less out of your pocket there is more to spend on your new home.”
