Financing Your New Home or Land
There are many options available to finance both land and or a home. Below you will find a description of the most popular lending solutions.
Most traditional lenders offer a standard 80/20 loan (20% down & finance the remaining 80%). When the economy is booming, some lenders will offer a 90/10 loan. When the economy is sluggish, some lenders will tighten their lending practices and require as much as 30% down. There are other programs that allow a lower down payment. Please see below for details.
Use this calculator to estimate payment & find out how much you can borrow based on your income and expenses.
There are many other types of loans, most of which are underwritten by a third party to reduce the lenders risk and to free up capital for that lender to lend more money. Here are a few examples:
FHA - The Federal Housing Administration is a United States government agency created in part by the National Housing Act of 1934 and is the largest underwriter in the country today. FHA loans allow as little as 3.5% down and will finance the remaining 96.5%. Your credit score and lender requirements can impact the down payment, so the actual down payment can vary.
VA Loans are mortgage loans issued by approved lenders and guaranteed by the U.S. Department of Veterans Affairs. VA loans allow zero down and provide 100% financing. Again, the actual down payment can vary depending on your credit score and/or the specific lender requirements of the lending institution you choose.
A USDA Home Loan is a mortgage offered to rural property owners by the United States Department of Agriculture and is guaranteed by the USDA Rural Development program (a department of the US Government). USDA loans allow zero down and provide 100% financing. USDA loans are not allowed in larger cities and metropolitan areas. Use this link to see if the home you want to purchase is in a qualified location:
These loans are preferred by individuals that have significant assets (especially for new construction) because they require the least paperwork and are easy to get. While traditional loans use the real estate being purchased as collateral, Asset Loans use “other assets” like stocks, bonds, other real estate, etc. as collateral against the amount borrowed. The collateral can be any asset with the exception of pre-tax assets like a 401K or IRA.
A bridge loan is used when you want to buy a new home and you need to sell your existing home and use the proceeds from that sell to fund your new home. It is a temporary loan that allows you to go ahead and move into your new home before you sell your existing home. Once your existing home is sold, those funds are used to pay off the Bridge Loan.
A construction loan funds the purchase of materials and labor during the construction of a new home. These funds are disbursed as the home is built and are called “Draws”. Most lenders require an inspection of the home to verify that portion of the home is complete before releasing the draw to the builder. Construction loans are traditionally used by individuals that plan to pay cash for the home once completed OR when the final financing is re-financed with another loan once the home is completed. Note that there would be two closings in this scenario (one for the construction loan and one for the final loan).
Construction to Perm Loan
A construction to Perm Loan is one loan with two parts that combines the construction phase and final financing into one loan. The advantage of a construction to perm loan is there is only one closing.
Underwriting and Packaging Your Loan
Most lenders will package your loan with other loans and sell them to investors. This is called “selling the paper”. Some lenders that have adequate assets may choose to keep the paper and not sell the loan and some lenders do both depending on the loan type and how the loan is guaranteed. A loan guarantee is usually provided by an “underwriter”. This lowers the lender’s risk because it is guaranteed (or underwritten) in the event you fail to pay your loan. While there are many private underwriters, a few you may recognize are FHA & VA.
Unlike commercial underwriters or FHA & VA that guarantee the loan, Fannie Mae & Freddie Mac purchase the debt from the lender which frees up more funds for the lender to lend to another customer. Fannie & Freddie have specific requirements that must be met before they will agree to purchase the loan. The requirements that may impact you as a borrower are related to the appraisal. Fannie & Freddie require that the home you are purchasing be appraised and that the lender not loan you more money than is suggested by the appraisal. Sometimes this can be an issue with new construction. It is not unusual for an appraisal to come in much less than the cost of construction. This is often an issue with higher-end homes that have higher levels of finish. Fannie & Freddie also require that the comps used to determine the value of the home be restricted to a 10 mile radius and for homes that were sold in the past six months. If no comps are found by the appraiser that meet those requirements, it is permitted to extend the search to one year and 20 miles. These loans that meet these criteria are referred to as “conforming loans”. If your lender can not get comps under these conditions, the only option would be a “non-conforming” loan which some lenders will not provide. For those lender that will do a Non-Conforming loan, the paper is usually kept by that lender without a third party underwriter, thus creating more risk for the lender and the reason many lenders will not provide these kinds of loans.
Envoy Mortgage deploys a business model that combines great service with superior technology designed to streamline the process while keeping the client connected and informed. Envoy Mortgage has licensed mortgage professionals who maintain high standards and uphold strong values and ethics offering a wide variety of mortgage products, from Traditional Loans, Asset Loans, Construction To Perm Loans to Custom Loans to meet your specific lending requirements. Envoy Mortgage offers one of, if not the most diverse lending product offerings for Residential Mortgages than most lenders available, including credit repair when needed to assure you are qualified for a loan. With a customer satisfaction rating of 4.9 out of 5, Envoy Mortgage is a great choice for your personal lending needs.
Carlton offers lending solutions of all kinds. He lives in the North Georgia Mountains and is available online as well as by email, text, phone or in person. He can help you with a traditional home loan as well as a construction loan, a construction to perm loan, an asset loan or a bridge loan. Specializing in "Residential Mortgages," Carlton would be a good choice if you are building a home or purchasing a new home.
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Finance your home by choosing from a variety of United Home Loan and Mortgage options with flexible rates and terms to fit your budget and lifestyle. Understanding this may be one of the most important decisions of your life the experienced team of Mortgage Loan Originators are ready to help you reach your goals of home ownership. Learn why they will be your best resource, review the options below and speak with a professional at UCB today.
In House Lender
558 Industrial Blvd
Ellijay, GA 30540
Zach handles all the in-house loans at UCB in Ellijay, GA. These loans would include all construction loans and construction to perm loans, all asset loans, bridge loans or personal loans. So Zach would be a good choice if you are building a home, wanting to purchase a new home before you sell your existing home or want to leverage your portfolio as collateral to get the loan.
558 Industrial Blvd
Ellijay, GA 30540
Betsy handles all the packaged loans at UCB in Ellijay, GA. Packaged loans meaning the paper is packaged into groups of other loans and sold to investors. So Betsy would be a good choice if you are buying a home and want to build a relationship with a local community bank. Betsy handles all kinds of loans including VA, FHA, USDA and conventional loans.
558 Industrial Blvd
Ellijay, GA 30540
Scott handles all the packaged loans at UCB in Ellijay, GA. Packaged loans meaning the paper is packaged into groups of other loans and sold to investors. So Scott would be a good choice if you are buying a home and want to build a relationship with a local community bank. Betsy handles all kinds of loans including VA, FHA, USDA and conventional loans.
6372 Highway 53 East
Dawsonville, GA 30534
Scott handles all the packaged loans at UCB in the Dawsonville, GA office. Packaged loans meaning the paper is packaged into groups of other loans and sold to investors. So Scott would be a good choice if you are buying a home and want to build a relationship with a local community bank. Scott handles all kinds of loans including VA, FHA, USDA and conventional loans.
Southwest Business Corp (SWBC) is a full-service direct lender in multiple states as a Seller Servicer to Freddie Mac and Fannie Mae. They are an approved lender by the Federal Housing Administration, the Department of Veterans Affairs, the United States Department of Agriculture Office of Rural Development, and other community and state lending programs. This enables them to process, underwrite, price and close the loan all within SWBC Mortgage while using their own funds to transact customers' closings. This allows for greater flexibility and control to help ensure smoother closings.
178 Bracketts Way
Blairsville, GA 30512