Here’s the Average Mortgage for a Newly Built Home. Can You Swing It?

There are many advantages to buying a new home, such as: B. the possibility of adapting a house according to your wishes and enjoying a space that has never been used and that shows no signs of wear and tear. But the Mortgage Bankers Association reports that new home mortgage applications were down 15.2% in October year over year. And the reason is probably because of the cost.

New construction costs explode

Nowadays builders have to struggle with widespread material bottlenecks that make it difficult to obtain the essentials. Prices for these materials have also skyrocketed due to supply chain issues and bottlenecks, and, not shockingly, these costs are being passed on to buyers.

The price of new home construction has gotten so high that the average mortgage amount on a newly built home has climbed to over $ 412,000. A sum that many buyers cannot afford.

Should you buy a new building?

In general, you’ll pay more – possibly much more – for a new build than for an existing home of the same size in the same neighborhood. If you can afford the higher price for new builds, it may be worth paying that premium.

In some cases, buying a new home will save you a lot of money on expensive renovations because if your home is built the way you want it to work from the start, you won’t have to make any changes after you move in. Also, buying a new home can save you money on short-term repairs. If you buy a home with a brand new roof, heater, and kitchen appliances, chances are that each of these items comes with a warranty that protects you from having to pay for repairs if something goes wrong.

In addition, it is common for new buildings to be equipped with a builder’s guarantee of at least one year, which covers processing problems. This means that if any shelves in your closet come loose after moving in or the drawers in your kitchen cabinet no longer close, your builder is obliged to fix these things for you free of charge.

You can also spend less on utility bills when buying a new home. If your home is equipped with energy efficient appliances and windows, that alone can save you a lot of heating and cooling.

On the other hand, you have to weigh the cost of all of these savings against the higher price of a newly built home. And you also have to expect delays in the construction process. This can cost you dearly if you have to vacate your previous home on time and have to secure a temporary apartment because you are unable to move into the new home.

Ultimately, there is no right or wrong when buying a new building. But you should be aware of what buyers are borrowing to get a newly built home these days. If this number is out of reach for you, then it may be better to buy a house that is already inhabited.

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