Financing Your Custom Dream Home

Finding your custom dream home is a little bit like the story of Goldilocks and the Three Bears. Some are too big, others too small. You need the one that’s just right! 

If you are looking for a small home, buying an older home can be an option. But have you considered building a small custom home? A custom home is designed to fit your needs and style, all while providing you the comfort you deserve. 

You may believe that a custom dream home is out of reach. However, you can finance a custom home with a good building partner and a little bit of patience for the process. 

Why Choose a Custom Dream Home?

Because you can have complete control of your home—regardless of your budget! When you design your home to fit your needs, you can ensure a luxurious quality home specific to you.  By “bringing your vision to life” we guarantee you’ll love the design. Our distinct advantage is that we will design a home for you that can truly be a forever home, rather than a for-now home.

Most home builders won’t say this—custom doesn’t necessarily mean a large footprint. You don’t have to build, or finance, more space than you need! Many homeowners are choosing small custom homes because they want to conserve energy and reduce their own consumption. Small custom homes could even help reduce fuel bills and insurance rates, as large homes are substantial to maintain. 

Financing Your Small Custom Home

If you’ve purchased a home before, then you might be familiar with the typical home loan process. However, a custom home requires different financing. When you buy an existing home, you just need a solid credit score and steady income. When building a custom dream home, a few more steps are required. 

1. Apply for Land Financing 

   You may already own the land you plan to build on. If not, you’ll need financing. This could be separate from or combined with your construction loan. A land loan begins with an inspection and appraisal of your plot. A good appraisal can lead to a low-interest rate in New Mexico. If you are applying for a land loan for your custom home, you’ll need to provide all your financial information and let the bank know how much of a down payment you’re prepared to invest—expect to put down a bit more than you would for a typical mortgage.  Once you’ve had the appraisal and your application is accepted, you can expect your loan in as little as 30 days.

2. Get a Construction Loan

   Unlike traditional mortgages, construction loans are not offered by all lenders and can be harder to come by. That doesn’t mean you shouldn’t seek one out! A New Beginning recommends First American Bank in Mesilla—we work with them directly on a daily basis for our clients. To get a construction loan, you’ll need building plans so the lender can assess the value of what you’re going to build. At A New Beginning, our build-to-suit process ensures you have all the details you need in hand to apply for your loan. Construction loans are short-term, based on the scope of your custom home project. Again, you’ll need a down-payment and your home plans in hand. 

3. Permanent (post-construction) Loans

   After your custom home is built, your construction loan will need to become a permanent loan. Some lenders do this as a construction-to close loan (sometimes called a one-time close loan). In other cases, you might need to apply for a new loan, which is essentially a more traditional mortgage loan. 

Build Your Small Custom Home in Las Cruces Today

In our initial meetings, we will ask for your pre-approval letter. This lets us know what level of financing you are approved for so we can tailor our offer to your budget. We always take the price of the lot into consideration while looking at this number as well.

A New Beginning Custom Homes is confident that we can exceed your expectations. We build you a quality place that you can call home. We invite you to view our Showcase, and if you’re ready to start a conversation, Contact Us today.