Mortgage Calculator  |  Credit Cards  Small Business  |  Your MoneyConstruction  |  EntrepreneurStudent Loan

money smart personal finances

Selecting a New Home | New Construction | Condo | Modular

Residential Construction

Residential Construction Loan Application


Once you have decided that new construction is right for you, you will need to determine which type of new home best suits your needs:

A Single-Family Home In A Development: In a typical development a land developer purchases a large parcel of land, develops the infrastructure such as streets and sewers and creates building lots for construction of individual homes. Subdivisions may have one builder or several builders who build similarly priced homes with uniform standards.

Condominiums: A condominium is a form of ownership and may vary in structure from a townhouse to a high rise. When you buy a condominium, you own the inside of your unit, but not the outside. The exteriors and common areas are owned, managed, and controlled collectively by all of the condo owners. Condominiums offer the same tax breaks and equity advantages of home ownership and are typically less expensive than single-family homes.They may also provide amenities, such as a swimming pool or tennis court. But keep in mind that you may have less space and privacy than in a single-family home. And, in a slow market, condo prices are usually the first to suffer and the last to rebound. In addition, the monthly association fees that you pay can increase. Be sure to investigate the rules set by the association that manages the complex, which can limit the number or type of pets you can have, set noise restrictions, and limit the use of common areas.

Modular Homes: Modular homes are increasingly attractive to home buyers and builders looking to reduce the hassle and expense of the construction of a traditional site-built home. Built and shipped in parts, or modules, and assembled on location, modular homes offer an appealing combination of quality, speedy construction, and lower cost. The on-site work, such as pouring a foundation, can be done while the modules are being assembled and shipped. Once the modules arrive on the site, a builder can complete assembly in a few weeks. Generally, modular-home projects are less likely to go over budget, and the end result is virtually indistinguishable from a traditional construction home. Not all lenders understand modular construction and not all offer the unique types of loans required for modular construction. The modular home builder will be able to direct you to a knowledgeable lender.

The Building Lot: Some new construction buyers prefer to find their own lot and hire a construction contractor to build the house on the lot. You can also build your own house by acting as the general contractor, and do some of the construction work yourself. This is not recommended unless you have construction experience. You may also be able to purchase a building lot from a builder and negotiate the home building process.

money smart