At Robert Ace Builders, we understand that financing your new home can feel overwhelming, especially if it’s your first time buying or building a home. Don’t worry, we’re here to help! Our experienced sales representatives, who are also licensed real estate agents, will guide you through the financing process and make sure you understand all your options. Here’s everything you need to know about financing your dream home with Robert Ace Builders.
1. Decide What You’re Comfortable Spending
While it’s common to set a top-line budget (e.g., “I don’t want to spend more than $400,000”), we recommend focusing on your monthly carrying costs, including mortgage payments, property taxes, maintenance, and homeowner’s insurance. By considering all of these factors, you’ll get a clearer picture of what’s affordable for you and your family. Still unsure? Our team is here to help you break it down and figure out a monthly budget that fits.
2. What Affects My Buying Power?
Your credit score plays a significant role in determining how much you can borrow. Generally, a credit score of 760 or higher will help you secure the best mortgage rates. A score of 620 is usually the minimum, but don’t worry if your score needs improvement—we’re here to help you get on track! Other factors that affect your borrowing power include:
Savings
Current debt (credit cards, student loans, car loans)
Employment history
Your rental or homeownership history
3. What Type of Financing Do You Need?
When it comes to paying for your new home, there are two main options: cash or bank financing.
Paying with Cash: If you plan to buy with cash, you’ll need to provide proof of funds. A proof of funds letter confirms that you have enough liquid assets to cover the cost of the home, including the down payment and closing fees.
Bank Financing: Most buyers opt for a mortgage. It’s best to start by contacting your bank or a lender to get a pre-approval letter. This letter shows that a lender is willing to lend to you up to a certain amount. Since building a new home is different from buying an existing one, be sure to mention to your lender that you’re looking to build.
If you’re not working with a local bank, no problem! Robert Ace Builders has established partnerships with local financial institutions and can connect you with the right lender for your situation. Contact us, and we’ll put you in touch with someone who can help.
4. Do I Need a Cash Deposit?
Yes, you will need to set aside cash for your new home. A down payment is required to cover initial costs like design, permitting, and starting construction. The down payment amount can vary based on your lender, but don’t worry—we’ll help you plan accordingly. If you already own land, you may be able to use that equity to offset some or all of your down payment requirements. Be sure to also account for any out-of-pocket closing costs.
We also recommend setting aside funds for upgrades and unexpected costs that may arise throughout the process. Our team will help you plan a realistic budget for your project, ensuring there are no surprises along the way.
5. What Will My Home Really Cost?
The total cost of building your home is more than just the base price—it includes a range of factors that contribute to the overall expense. Our goal at Robert Ace Builders is transparency. We’ll provide you with a clear estimate and help you understand the breakdown of all costs. Some builders hide hidden fees or minimize certain expenses just to get your business—we don’t do that.
Here’s what you need to know:
Fixed Cost Estimates: We’ll give you a detailed estimate based on a specification list of materials and designs.
Allowances: Some costs, such as fixtures or upgrades, may be based on an allowance. These are pre-established amounts for certain items that could vary depending on your selections. We’ll clearly highlight any allowances in your contract.
Additional Costs: Depending on your location, there may be additional costs like permits, HOA fees, or engineering plans. Our team will help you identify these potential costs upfront.
6. Why Do Prices Vary?
You may notice that the cost per square foot of homes with similar plans can differ. This can happen for several reasons, such as:
Square Footage Calculations: At Robert Ace Builders, we use the ANSI Z765-2003 Plan-Based Method for calculating square footage, which only includes the livable, heated areas of your home (excluding garages, porches, and unfinished spaces).
Design Complexity: Unique rooflines, room spans, and custom features can drive up costs.
Materials & Fixtures: The quality of materials—such as countertops, flooring, and fixtures—will affect the overall cost. A higher-end kitchen or luxury bathroom will increase the price per square foot.
Personal Selections: If you choose higher-end finishes, smart home systems, or custom features, those choices will be factored into the final cost.
Making Your Dream Home a Reality
At Robert Ace Builders, we’re committed to providing you with a clear, honest understanding of the costs involved in building your new home. Our sales representatives will walk you through each step, ensuring that you understand what’s included in your estimate and what potential costs may arise during the construction process.
Ready to get started? Contact us today to discuss your financing options and begin the journey toward your dream home.
Comments