Pre-Qualification and Pre-Approval

We’re excited to co-launch a new video series with Farmers National Bank. In this, the first episode of the "How to finance a new home" series, Juan Santiago (Community Development Manager at Farmers National Bank) sits down with our own Rob Struharik to differentiate between pre-qualification and pre-approval when beginning the mortgage application process. This episode also touches on points including who to call when looking for financing and what documents you will need for pre-approval and pre-qualification when seeking a home loan to buy or build a new home.

Lending Terminology & Loan Hurdles

When beginning the process of financing your new home there may be many terms you are not familiar with, such as P.M.I. (Private Mortgage Insurance) and L.T.V. (Loan to Value) Juan Santiago, of Farmers National Bank In Canfield, Ohio, sits down and explains how these terms work together to determine financing qualification and predetermine financing limits. We also touch on some loan hurdles that need to be addressed and completed in order to begin you new home financing. These hurdles in the mortgage process include; credit worthiness, debt to income ratio, and additional funds required for your loan closing.

Debt To Income

You may be wondering: What exactly is DTI? While there are many important factors that go into a lender's evaluation for approval of your new home financing, one of the most important factors is debt-to-income. Juan Santiago (of Farmers National Bank) and Rob Struharik (of Master Plan Homes) go into detail about how this ratio is used to evaluate for pre-qualification, along with some common misconceptions and myths that people assume when thinking about debt-to-income for your custom home build.

Down Payment & Funds for Closing

In this installment of the Master Plan New Home Financing Guide we sit down with Juan Santiago of Farmers National Bank and review options for your down payment and funds for closing. Touching on points such as, multiple avenues that can be accounted for when gathering resources for closing, including checking accounts, savings accounts, money market accounts, investments and even equity in your current home. We also outline a "Bridge Loan" and how the equity in your new home, or purchased lot, can play a vital role in financing your new home build.

Lending for Your Future Homesite

In this episode of the "Master Plan New Home Financing Guide" we sit down with Juan Santiago of Farmers National Bank and discuss purchasing a homesite prior to building your new home. This "Lot Loan" can be use to purchase a tract of land with the intention to build a home within a 5 year period. Through some valuable insight Juan breaks down how the purchase of that home site can actually be used as or toward a downpayment in the home lending process.

Finding a Builder & Completing Financing

This episode of the "Master Plan New Home Financing Guide" features the steps needed to accomplish, and the documents you need to obtain, to complete the lending process for building your new home. Juan Santiago from @FarmersNationalBank highlights the lending process, such as a signed contract with your house builder, home plans, home specifications and a cost breakdown for the home build. Also, in this episode we outline a construction contract and steps the bank completes to process your loan, such as title work, appraisals, loan closing and timeframe expectations for each.

After Closing & Draw Schedules

Today we discuss the procedures that take place after the loan closing on your new home building project. Juan Santiago of Farmers National Bank outlines the 5 payments, called "Draws", that are released to the home builder or contractor based on the stages of completion in the process. In addition we outline how variables including weather and the scope of the custom home build can affect when the draws are allocated.

Construction to Permanent Loan And Project Completion

In the final episode of the "How To Finance A New Home" series with Juan Santiago (Farmers National Bank) & Rob Struharik (Master Plan Homes), we discuss the timelines on a typical construction loan and how it converts into a permanent loan. We also acknowledge how the two loan types interact and the potential for additional discussions and/or updated financial information for your banking institution. We hope you have enjoyed the series and encourage you to view more of our content on our youtube channel at www.youtube.com/masterplanbuilders

Financing Your New Home Build