Florida Buyer Broker
Builders offer buyers new home loan incentives.
Incentives are often given buyers when they work with builders in-house loan company to build new homes. These incentive are usually thousands of dollars. This new home loan incentive is always given as a credit toward the buyers closing cost. The incentive is not typically offered the buyer if they do not use the in-house lender for their new home loan. New home buyers who need financing rarely look for alternative new home loan options when the builder offers such strong incentives.
In Florida there is no rescission period for new single family home contracts. Florida Statute 718.503 does provide a 15 day rescission period for new condominium buyers and 3 days for re-sale condominiums.
Most new home track builders like Pulte and Lennar offer buyers in-house loans in their new developments which only require the buyer provide the down payment until the building process is complete. Although, additional money may be required from the buyer for upgrades and options during the option selection process. The buyer begins the loan process as soon as they enter into the new construction purchase contract agreement. The loan is not finalized until the home is completed. This is know as an end loan. The required down payment depends upon the type of loan the buyer qualifies to obtain. Down payments vary. The money is required at the time of or within a few days of signing the new home purchase contract. The down payment and option money is almost never held in escrow. The builders request the buyers sign waivers of escrow so they can use the money during the construction process.
Custom home builders and luxury home builders typically require the buyer to obtain a construction perm loan. This is a new home loan were the money is provided in increments during the construction process. When the home is completed it converts to a permanent loan. This type of new home loan is complicated.
Construction Loan Programs
5/5 ARM Conventional | 5/5 ARM Mini Jumbo | 5/5 ARM Jumbo
You are credit-approved for a construction loan! Great!! Congratulations!! Now the lender needs to get your builder/contractor approved. Provide your Home Loan Specialist with a completed Builder Package. The package contains the following information the lender needs to review and approve your builder/contractor.
- Required Builder package includes:
- Completed/Executed Contractor Profile Form
- Sign-off on Draw Schedule
- State Contractor’s License
- Declaration Page Commercial General Liability Insurance with $1M in coverage with commercial Liability. If not available, personal liability policy referencing subject property.
- Declaration Page Worker’s Compensation Insurance, if Contractor has employees
- Contractors Driver’s License
- Completed W-9
Once the lender has received the completed Builder Package, please allow 72 hours for review.
Plans & Specs
Fantastic!! Your builder has been approved!! Now the lender needs to have access to the full plans and specs for your dream home. As the lender processes your loan, they will need to order an appraisal that is subject to the completion of your home. The plans and specs will come in handy for the appraiser to accurately assess the value of your home. An electronic copy of them will be ideal, providing them early to your Home Loan Specialist will help move things along with your appraisal.
How Construction Loan Works
The Construction Loan is available for construction of single-family residences. It offers a 12-month “draw period” where the lender will disburse funds at the request of your builder for work completed according to the established draw schedule. An inspection to ensure that the builder has complied with the draw schedule will be requested prior to disbursing funds. The draw checks will be made payable to you and the builder unless instructed otherwise in writing. The final draw check will always be made payable to builder and member with no exception.
During the draw period, the owner is responsible for the monthly interest-only payments. The payments are based on the balance of the funds disbursed.
Once the home is completed, after receipt of the certificate of occupancy and the final inspection, your construction loan will transition to the permanent mortgage loan. At that point, you may lock in your permanent loan’s rate.
The lender will need proof of homeowner’s hazard and flood insurance coverage, if applicable, along with documentation that the premium(s) are paid in full for one year.
Construction Period and Extensions
- If construction is not complete within the 12-month construction period, a 90-day extension maybe available on a case by case basis. The loan may be extended a maximum of two times. Extensions are not automatic and are granted at Management’s discretion. Modification and recording fees will apply and are due and payable at the time of extension.
- At the end of the construction period, if the construction is not complete, Principal and Interest payments will be collected on the ‘total loan amount’ financed until construction is completed.
The construction loan cannot convert to permanent loan prior to receipt of occupancy and final inspection.
Rates & Fees
- Construction Rate and Construction Conversion Fixed Rate are posted on the daily rate sheets for lenders.
- ARM rates will be available from the Rate Lock Desk
- Modification fees vary by lender
- Conversion fee vary by lender
- Recording fees, vary by county
- Certificate of Occupancy and Final Inspection are required at completion of Construction in order to exercise the conversion option or to modify the construction loan rate to the permanent financing rate.
- 5/5 Conventional ARM –
- Can convert to a 30 Year fixed rate at completion of construction, based on Construction Conversion Rate on daily rate sheet or,
- Can stay on the 5/5 ARM and modify the rate to the day’s prevailing rate or the note rate, whichever is lower.
- 5/5 Mini Jumbo & 5/5 Jumbo ARM –
- Can modify the rate to the day’s prevailing rate or the note rate, whichever is lower.
- Fees apply to the conversion or modification as noted above.
All draw schedules must be approved by the lender prior to closing. As phases of the construction are completed, the home will be inspected. Upon satisfactory inspections, the funds will be disbursed via check made payable to both the member and builder.
“The most important thing a buyer can do is first of all work with a buyer broker.”
As stated by AARP and the Consumer Federation of America in REALTOR® NEWS
Florida Buyer Broker is licensed to sell real estate in Florida, USA.
There is NEVER a conflict of interest between the buyer and the seller when the buyer chooses to work with Florida Buyer Broker. A single agency buyers ONLY real estate office, serving buyers with integrity, loyalty, honesty, skill and expertise.
Beverly Howe, buyer broker relationship with buyers is always Single Agency representing buyer’s only. Her buyer clients receive undivided loyalty throughout the real estate transaction. See Fiduciary Duties required by Florida Law and Brokerage Relationships , Buyer Agent Disclosure for more information.
Sellers listing agents have confidence in buyers who obtain the professional services of Florida Buyer Broker.
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