Posted by Ben Wills in Home Buying

​You’re ready to purchase your first home.
You’ve saved some money and think it will be enough for a down payment, and you feel comfortable that you will be able to get new home financing for the balance.
You search online and make plans to go see your dream home only to find out that the home sold the day it went on the market.
Later you hear that there were multiple offers on the home and now you’re starting to hear rumors that you need all kinds of pre-qualifications before you even begin.

​Sound familiar?

​In the resale market, buyers are submitting offers where there were multiple offers submitted on the same property. In the new home industry, homes are sold the minute they are released, and oftentimes waiting lists exist.

​​Here are my top 3 pieces of advice I give first-time homebuyers for how to finance their new home construction.

Getting House Keys

1. Know How Much Home You Can Afford

​Many first-time homebuyers are unsure of how much to spend on buying and financing a new home build, how much to put down, and what to budget for their monthly housing expense.

​​For those looking to purchase a new home it is important to understand that the cost to maintain a new home is minimal for the first 10 years compared to buying an existing home.

​​Remember that a new home costs more up front than an existing home, but the cost to maintain a new home is much less than it would be on an existing home. This is a very important consideration when determining how much to budget to spend on a new home.

2. Conserve Funds

​When asked about buying a new construction home and a down payment, the second piece of advice I would give a homebuyer is that you need to conserve funds for the down payment, as the first year of homeownership is going the be higher than subsequent years.

​First-year expenses include furniture, lawn equipment, window coverings, decorative items, and many other items you will need to purchase for your home. Therefore, you should work with your loan officer to determine what the minimum down payment is and make sure the payments leave you with enough funds in reserve for the first-year expenses.

Homebuyers Making a List With Moving Boxes

​A question I get asked frequently is, "When is down payment due for a new construction home?" The answer to that is at the time you write your contract, so be sure to save now so you’ll be ready at closing.

3. Stretch Your Monthly Payment Amount

​The third piece of advice I would give to dispel common myths about home financing is to stretch a little on the amount of the monthly payment you are willing to make for your new home.

​This is going to be your home for many years. Your income should increase over time, but your payment will remain relatively the same, except for small increases to your taxes and homeowner’s insurance.

​Do not compromise on what you want in your new home to save a few dollars a month. It may cost you more in the future if you find yourself needing to buy a bigger home in a few years.

Streetscape of Homes

​I strongly advise buyers to meet with a loan officer that works exclusively with new homebuyers, like M/I Financial loan officers do.

They will work directly with you to find out how much you can qualify for, determine the monthly payment range, and provide new home down payment assistance and tips.

​​By taking these steps you will position yourself to make the right decision for family. You’ll be in your new home in no time!


Ben Wills
Ben Wills


​Ben Wills is the Mortgage Branch Training Officer for M/I Financial, LLC. Ben has been in the mortgage field for over 40 years and has assisted thousands of homeowners in financing new home construction.

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