Terms Every Homebuyer Should Know

ITerms every homebuyer should knowt’s the ideal time to begin the process of building your brand new Simplicity home. But before you get started down this important path to becoming a new homeowner, it’s important that you understand the lingo – which is different than when purchasing a home via a standard Real Estate transaction. By familiarizing yourself with terms associated with the homebuying process, you’ll have a better understanding of the process and what to expect and won’t be caught off guard as you navigate the process.

Getting Pre-Approved
The most challenging part of buying a home can be seeking out and acquiring a mortgage. When building a new home, the process is more complex than with a traditional mortgage. You may own your land outright, need to leverage the equity in the land to build your home, or buy the land and home with an all-in-one construction loan. One of the first things to do in this process is lender pre-approval.  You can do this with a lender of your choice. When working with a mortgage lender during this initial process, you will find out how much home you can afford to buy prior to ever starting to research home plans and options. This process contains no obligation to the lender or you as the home buyer. Completing this desired first step helps ensure that you are qualified to build your new home and will say to your home builder that you are serious about moving forward, allowing them to best help you build the home of your dreams.

An appraisal is the process by which the value of the home is determined. This process is done by a qualified and certified appraiser. The process is important for you to know the value of your home but also required by the lender to verify the purchase price is equal to or less than the property value.

Down Payment
A down payment is the amount of cash that is applied towards the purchase of your new home at the time of closing.  When building a new home, a cash down payment is typically required.  However, down payment amounts vary depending on the type of loan being secured.  At Simplicity, we build homes on rural land that qualify for special low-down-payment construction loans, special loans for Veterans, and many others. It’s important that you discuss your individual needs with a qualified construction loan lender.

Finally, closing – the day that every new homebuyer waits for! During closing, all documents and contracts related to your purchase will be reviewed, funds will be exchanged, and the title and deed of your new home will be signed over to you. Congratulations – you’re a new homeowner!

Education throughout the building process.

When building a new home, the process is significantly different than when buying a home via a typical Real Estate transaction. Simplicity team members guide you through the process from start to finish, ensuring a smooth construction process. Check out our home plans here and start dreaming about your new home today!