FINANCING Options for New Construction
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Most national and semi-custom builders use their own preferred lenders. You typically pay a deposit upfront, and the loan closes once construction is complete. PROS: Simple process, potential closing cost incentives. CONS: Limited lender options. Lender may not be local to area. 1. Builder Financing (End Loan)
Common for full custom builds, this type of loan funds construction in phases and converts to a permanent mortgage upon completion. PROS: Flexibility with builder choice and draw control. CONS: More paperwork and qualification requirements. 2. Construction-to-Permanent
Many buyers also choose to sell their current home once construction is underway or use bridge loans or HELOCs to manage timing.
Timelines
Contingent on the Sale of a Current Home: Common among move-up buyers; some builders offer extended build timelines to allow time to sell. Appraisal Contingency: Ensures the home appraises for at least the purchase price.
Financing Contingency: Protects buyers if loan approval falls through.
Build Timeline: Typically 6–9 months for production homes, up to 12+ months for custom builds. Weather & Material Delays: Especially in winter months, supply chain or permit delays can extend timelines.
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