After years of New Construction being a specialty for The Cowart Team, we know how exciting the process of buying a new build can be. When navigating a New Construction Loan, as you may expect, things look a little different throughout the mortgage process. Of course this leads to a lot of questions, and whether you’ve come to the builder or us, the lender, first, we’re happy to walk you through it! Together, let’s look at a couple different approaches to the New Construction Loan, along with some distinct differences in the timeline and feel of what you’re stepping into.
Two Common Paths
Not every new build is financed the same way, so it helps to know which path you’re on. If the builder is financing construction and you’re buying the finished home, your loan works a lot like a typical purchase. You sign a contract with the builder, and your mortgage closes once the home is complete.
If you’re building on your own lot or working with a custom builder who needs funds during the build, you may use a construction-to-permanent loan. This type of loan pays the builder in stages as work is completed, then converts to a regular mortgage when the home is done. Many buyers like this option because it can mean one application and one closing.
Not sure which one fits? That’s a great first question to ask us!
A Longer Timeline
A typical home purchase often closes in about 30 to 45 days. With new construction, you could be looking at anywhere from 60 days to a full year, depending on the project. That’s a lot of time, and a lot can happen along the way! Your finances may shift, your plans may change, and weather, permits, or material delays can move the build schedule. That’s why new construction takes more than getting approved and waiting. You need a team that stays connected and helps you adjust as things move!
New Lingo
Mortgage terms can already feel like their own language. New construction adds a few more! Here are some you may hear:
- Extended rate lock: a rate lock that covers a longer build period.
- Draw schedule: the plan for paying the builder in stages as work is completed.
- Builder incentives: credits or perks a builder may offer, sometimes tied to using a preferred lender.
- Completion appraisal: an appraisal that confirms the finished home’s value.
- Certificate of occupancy: the local approval that says your home is ready to live in.
- Final walkthrough: your chance to review the finished home before closing.
We believe the mortgage process should be a conversation you’re part of. You should know what’s happening, why it matters, and what your options are. Our goal is to listen, educate, and make it all easier to understand.
Advice Evolves Too
Like with any other situation, advice changes based on the circumstances! In all the ways you New Construction Loan looks different, so does our approach to getting you what you need. As professionals and specialists in the New Construction world, we know this process just as well as any other mortgage process we’re going through.
We’re looking ahead at your circumstances and finding the best way to get you into your new home, especially as things change and evolve throughout a complex process. That means checking in, asking questions, and helping you spot the decisions that matter as closing gets closer.
Your Lender Matters
With more moving parts and a longer timeline, the team in your corner makes a real difference. You deserve a lender who’s ready to guide you every step of the way!
Our local team has been helping Central Virginia buyers since 2003. We work closely with you and your builder, keeping everyone on the same page from contract to closing. We’re listening, planning, and solving alongside you the whole way, which matters even more when the process keeps evolving after you get started.
Let’s Get Started
Thinking about a new build? Talking with us early helps you know what to expect and plan with confidence – and we make getting started easy! Just fill out our contact form or reach out to one of our team members, and we’d be happy to start the conversation.