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What you need to know about building a new home

New Construction

Designing and building a home to fit your family’s needs, your lifestyle, and your tastes can be very rewarding. However, careful and thoughtful preparation is key, as many decisions will have to be made throughout the process.

Considerations Before Deciding To Build

Everything from choosing the right builder to finalizing designs all require selecting the best craftsmen for the job. The same care should be taken when choosing your lending partner. As a national leader that specializes in new construction loans, we can help you understand all your options and make the entire process go as smooth as possible.

Here are five things to consider when building your new home:

  1. Know your numbers, get prequalified.

Before you begin, determine whether you can afford to build the home you want. As part of the prequalification process, a Loan Advisor can help you run some numbers based on the cost of construction. This includes funds needed for the down payment, your current income and assets, and other related calculations.

Keep in mind that home construction lending is a little different than regular mortgage financing. You’ll need a home construction line of credit to pay subcontractors and suppliers during the build process. Then, depending on your loan option, you may need a mortgage to pay off the construction line once the construction process is complete.

We have a range of construction loans that can be tailor-fit to your needs.

  1. Check the reputation of your builder.

There are many builders, but not all are created equal. Do a little research to find out which builders have the best reputation. The National Association of Home Builders (NAHB) has a searchable list of local associations by state or ZIP code to help you find the best builders in your area.

  1. Build with resale in mind.

No matter how much you love the house that you are building, it may not be the last home you will own. Knowing that, you should be mindful of its potential resale value. Ask yourself if the features you’re considering are likely going to appeal to others. The upgrades today’s homebuyers value the most include a separate laundry room, exterior lighting, energy efficient appliances and windows, outdoor living spaces, and hardwood floors.¹

  1. Think green.

Make sure you do your research to maximize energy efficiency in the design of your new home. Spend time choosing your insulation and HVAC systems, as well as energy-efficient windows, appliances, and water-conserving faucets and toilets.

  1. Don’t forget the punch.

During the final phase of construction, you’ll go over a “punch list” with your builder. Typically the lender will hold money in escrow for the completion of items that still need to be completed or repaired.


It’s a good idea to have your real estate agent (if you are using one) participate in this walk-through, as they are not as emotionally attached to your home and may have a better eye for identifying flaws. As long as the new home has reached the point of substantial completion, depending on the unfinished items, you might be able to proceed with closing, even if everything was not completed.

Let us help you get started. As your mortgage specialist, we can offer you the financial solutions to help you move into your new home.


¹2018 Kiplinger.


This is not a commitment to lend. Programs available to qualified borrowers. Subject to credit approval, underwriting approval and lender terms and conditions. Program terms available may be based on the state or county in which the financed property is located. Programs subject to change without notice. Additional restrictions may apply.


While Opes Advisors, a division of Flagstar Bank, Member FDIC, uses all reasonable efforts to ensure that this information is current, accurate and complete on the date of publication, no representations or warranties are made (express or implied) as to the reliability, accuracy or completeness of such information. Opes Advisors, a division of Flagstar Bank, Member FDIC, therefore, cannot be held liable for any loss arising or indirectly from the use of, or any action taken in reliance on, any information appearing in this.