Building a new custom home is a big investment and having a trusted mortgage lender can help take the stress out of the finance process. Our In-House Wausau Homes Finance Team is dedicated to providing convenient and easy to understand mortgage options that focus on the unique needs of your family.
Home Financing Made Easy
New home construction loans involve more than just the negotiated purchase price of an existing house. Lenders want to see solid, realistic plans and budgets. So, it only makes sense to use a lender who already has a great working relationship with your builder and understands the Wausau Homes building process.
Paramount Residential Mortgage Group is teaming up with Wausau Homes to bring you:
- Custom home building experience of over 50+ years
- Ranked in the top 25 of private mortgage companies
- Financing options and quick loan approvals
- Historically-low interest rates
- 24-hour approval process
- Lock in your interest rate for 180 days during construction
- Financing credits available
- 5% down options
- Finance land and construction cost in one loan
- New construction loans processed in as few as 7-15 days
Our Wausau Homes Finance Team provides a variety of tools and programs to meet the diverse finance needs of every homebuyer. They are here to answer your questions and can make your mortgage loan process flow more smoothly and ensure that no detail gets left out.
Your Home Construction Mortgage Options
A consultation with our financing experts will help you determine the best loan option for your circumstances. Here’s a quick rundown of mortgage options for new home construction.
Single-Closing Versus Double-Closing
A single-closing loan is also called a “construction-to-permanent” loan; you apply for the entire mortgage at one time and you only need to close once. It will cover the price of the lot and construction costs, and after completion, the balance will be restructured into a traditional mortgage.
A double-closing loan, as the name suggests, involves two application and closing procedures. First, you will apply for a “construction-only” loan that will finance the property and the house construction. The advantage is that during the home-building process, you will have about a year to research loans and rates to find the best option for you.
Conventional mortgages generally require a down payment of 5% to 20%. You will also need a relatively good credit score of 620 in order to earn the 5% down payment. An average credit score of around 740 should get you the best interest rates available.
VA loans are backed by the Department of Veterans Affairs and guarantee that the lender will recover the loan should you default. Therefore, a Certificate of Eligibility that proves your military service to VA lenders can get you valuable benefits, including:
- No down payment
- Right to pay the loan off early without penalty
- No mortgage insurance (but there is a VA funding fee)
The VA doesn’t have a minimum credit score requirement for loans, but expect a VA lender to require a score of at least 620.
A similar concept to a VA loan, FHA loans are secured by the Federal Housing Administration. The interest rates are typically lower than those of traditional mortgages, minimum credit score requirements range between 500-580, and you could qualify for a down payment of only 3.5%. However, you must prove your intention to live in the house, and you will be required to pay mortgage insurance.
The Mortgage Prequalification Process
Mortgage preapproval is just a preliminary part of the mortgage application process, and you will need most of the same documents for both procedures. Before you start the application process, make sure you understand what lenders are looking for so you can gather the required information.
Employment and Income
Employed individuals will need to provide W-2s, paycheck details, and proof of earnings from bonuses, overtime or differential pay. Rental property income will need to be proven with detailed records, including addresses, current valuation and lease agreements. Independent contractors and freelancers should be prepared with two years’ worth of 1099 Forms. Those who are self-employed will need to provide business records with profit and loss statements.
Lenders will need the most recent of the following to determine your debt-to-income ratio:
- Home mortgage statement
- Mortgage insurance declaration statement
- Car loan statement
- Student loan statement
- Credit card statements
- Statements from other lenders
- History of regular rent or utility payments
For each lender, make sure you include the creditor’s name, address, your account number, minimum payment amount and the current balance.
You will need to provide your lender with about two months’ worth of statements from any bank, brokerage, investment or retirement account that you will use to back your loan. Make sure that you include every page of each statement, including the blank ones, and that the vested balance is shown (if applicable).
Other Financial Records
The list of factors that can influence your loan eligibility is broad, so it’s a good idea to discuss the requirements with your financing team. Depending on your specific financial situation, these additional follow-up documents may be needed.
- Proof of alimony or child support payments
- Documents from a foreclosure or bankruptcy
- Twelve months of rent history and property management contact information for residences within the past two years
- Gift letters, if your family or institution will be making your down payment
Take the First Step Toward Your Custom Home Today
Why run yourself ragged trying to coordinate between home builders, contractors, inspectors and lenders? Wausau Homes and our Finance Team make the hard work simple by bundling the entire new home construction process under one roof.
Start the process now by contacting your local Wausau Homes builder to discuss your dream home and connect with one of our Finance Team Members to get prequalified.