Buying a finished home versus building
Buying a finished Fernway Road home can use a regular mortgage. Building on your own land usually means a construction loan, which pays out in stages and then converts to a standard mortgage.
Construction loans
A construction loan covers the cost of building. The bank releases money in draws as each stage is finished, and you usually pay interest only on what has been drawn. After the final inspection it turns into a 15- or 30-year mortgage. If you are buying land to build on, the lot can often be rolled into the loan.
Conventional loans
Conventional loans are not backed by a government agency. They are common for buyers with solid credit and savings, and a larger down payment generally means lower costs over time.
FHA loans
FHA loans are insured by the Federal Housing Administration and are popular with first-time buyers because they allow smaller down payments and more flexible credit requirements than many conventional loans. They carry mortgage insurance.
VA loans
VA loans are for eligible veterans, service members and some surviving spouses. They are backed by the Department of Veterans Affairs and often require no down payment.
USDA loans
USDA loans are backed by the US Department of Agriculture for eligible homes in eligible rural and small-town areas, with income limits and often no down payment. Whether a specific address qualifies depends on USDA's maps, so check the address with a lender.
Lot and land loans
If you are buying land first, a lot loan or a construction loan that includes the lot can cover it. Terms are usually different from a home mortgage, so ask your lender about both options.
Before you apply
- Get pre-approved before you pick a plan or a lot, so you know your budget.
- Gather income documents, bank statements and ID.
- Avoid new debt or big purchases while you are applying.
- Compare more than one lender if you like. You can use any lender you choose.
Frequently asked questions
Who does SPK Homes work with for financing?
SPK works with Rich Brewer, VP and Banking Center Manager at DeMotte State Bank (NMLS# 1446903), who handles construction loans, FHA and conventional mortgages and lot financing across Northwest Indiana. You are free to use any lender.
Do I need a construction loan to buy a Fernway Road home?
Buying a finished Fernway home can use a regular mortgage. Your lender will tell you which fits your situation.
What is the monthly payment on a new home?
It depends on the price, down payment, rate and term. Use our mortgage calculator for an estimate, then ask a lender for a real quote.