Part 6: Sell Your Existing Home First
If you already own a home, you can reduce the potential cash-flow pinch by selling your existing home before you start building your WI new construction. This allows you to put the entire equity of your existing home against the price of your WI new construction project. It also reduces the chance (or length of time) you will have both a mortgage payment and an interest payment due on the WI new construction loan. The sales cycle right now is decreasing but still long enough to make it a good choice to get your existing home listed if you are planning to start building within the next six months.
Another advantage to selling now is that you can use the proceeds to fund the initial WI new construction draws. This will reduce the amount of time you are using the bank’s money and consequently reduce the interest you have to pay. And, you may be able to negotiate a better interest rate on your WI new construction loan because you will be reducing your credit risk.
What About WI New Construction Closing Costs?
Closing costs for the a la carte process can mount if several different loans have to be made independently of each other. For instance there could be four closings involved if a buyer needs to get a home equity loan to put together the down payment for the lot. That would be the first closing. Then there would be a lot loan closing — followed by a WI new construction loan closing — followed by the end loan closing. The more of these loans that can be combined into a single WI new construction program, the more the buyer can save in closing costs.
Nelson & Associates is your New Construction Buyer’s Agent Specialist.
As a Certified Residential Specialist and Accredited Buyer Representative with years of experience helping clients purchase WI new construction, I would be very happy to work with you on your new construction project. Give me a call today, and we can get started right away.