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Shop around to find the best mortgage. It may be a good start to ask neighbors and colleagues whom they can recommend. Referrals tend to be the best way to find new business contacts, even mortgage brokers. Shopping around a little can help you find security and enable you to put more money into your home.
Here are a few things to consider when beginning your search.
The Federal National Mortgage Association (FNMA)/Fannie Mae is one of the largest single sources of mortgage funds. They underwrite a huge portion of the conventional loans by mortgage bankers. The FNMA provides funds for FHA and VA loan guarantee programs and conventional loans. They are what you would consider as secondary lenders. They will purchase primary loans from other banking institutions if they meet Fannie Mae loan requirements. Most bankers do their best at meeting these requirements so they will have that later option of selling the mortgage to them.
The Federal Home Loan Mortgage Corporation (FHLMC)/Freddie Mac is similar to Fannie Mae. They purchase loans for FHA, VA and conventional loans.
The Veterans Administration (VA) is a government loan guarantee that provides financing to qualified veterans, national guardsmen and reservists. These loans are guaranteed by other loan sources.
The Appraisal
You will be required to have an appraisal done after you have chosen the lot and purchased the home plans. This will determine the value your new land and home will have. This amount will determine the loan amount, down payment and monthly cost of the loan by the lending institute. Knowing the appraisal value, the lenders can factor your financial standings and the actual requirements. If you are unable to agree or meet the terms offered, speak with your builder. They may be able to make some changes to lower the cost that will satisfy the lenders. Remember location, age of subdivision, design, size of house, number of houses for sale in the prospective area, etc. all determine the total value of your home and property.