First-Time Home Builder? Here's What You Should Know About Financing

Embarking on the journey of building your first home is both exciting and complex. Understanding the financing process is crucial to turning your dream into reality. At Doug Parr Homes, we're committed to guiding you through each step, ensuring a smooth and informed experience.

Understanding Construction Loans

Unlike traditional mortgages, construction loans are short-term, typically lasting 12 months, and are designed to cover the costs of building your home. These loans are disbursed in stages, known as "draws," corresponding to various phases of construction. During the construction period, borrowers usually pay only the interest on the amount drawn. Once construction is complete, the loan either converts to a standard mortgage or is paid off with a new mortgage.

One-Time Close Construction Loans

A popular option for first-time builders is the one-time close construction-to-permanent loan. This loan simplifies the process by combining the construction loan and the permanent mortgage into a single transaction, reducing closing costs and paperwork. With one closing and only interest payments required during construction, you can build your house and afford your current living expenses too.

Down Payments and Credit Requirements

Construction loans often require a larger down payment than traditional mortgages, typically ranging from 20% to 25%. Lenders will also assess your creditworthiness, looking for a solid credit score, stable income, and a low debt-to-income ratio. Preparing your financial documents in advance can streamline the approval process.

Partnering with Doug Parr Homes

At Doug Parr Homes, we understand that navigating financing options can be overwhelming. That's why we've partnered with trusted lenders to offer a variety of loan programs tailored to your needs. Our preferred lender, Shannon Brown at Service First Mortgage, is dedicated to helping you find the right financing solution.

Take Advantage of Special Incentives

To make your home-building journey even more rewarding, Doug Parr Homes regularly offers a range of valuable purchase incentives. Depending on the time of year and the home you choose, incentives may include closing cost assistance, design center upgrades, interest rate buy-downs, or move-in ready packages. Because these offers change throughout the year, we encourage you to contact our team or your sales consultant to learn what’s currently available and how it can help you personalize your new home.

Final Thoughts

Building your first home is a significant milestone. By understanding the financing landscape and partnering with experienced professionals like Doug Parr Homes, you can navigate the process with confidence. We're here to support you every step of the way, turning your vision into a place you'll proudly call home.

Ready to start building your dream home? Contact Doug Parr Homes today to explore your financing options and take the first step toward homeownership.