New Home Financing Simplified

Buying a new Normandy home should be an exciting milestone, not an overwhelming process. Whether you’re just starting to explore your options or are ready to choose your dream home, understanding the financial side of homeownership is key to moving forward with confidence.

Let’s break down the essentials of financing a new home so you can take the next step with clarity and peace of mind.

Understanding Your Loan Options

Not all mortgages are created equal. The right loan for you depends on your financial situation, down payment, and long-term goals.

Conventional loans are a popular choice for buyers with good credit, stable income, and a down payment of at least 3-5%. As the Consumer Financial Protection Bureau (CFPB) explains, a conventional loan is “any mortgage loan that is not insured or guaranteed by the government.”

FHA loans are often a great fit for first-time buyers. Because the Federal Housing Administration insures these loans, you may qualify with a lower credit score and a down payment as low as 3.5%.

VA loans are an exclusive benefit for veterans, active-duty service members, and eligible spouses. These loans often require no down payment and feature favorable interest rates. You can learn more about VA home loans from our trusted partner, Green Brick Mortgage.

USDA loans are designed to help buyers purchase homes in eligible rural and suburban areas with no money down. If you’re considering a community outside the major metroplex, this could be a smart option.

Our preferred lender, Green Brick Mortgage, offers expert guidance on all of these programs. We encourage you to visit their loan options page to explore what best fits your situation.

Key Terms Every Homebuyer Should Know

Getting comfortable with a few basic terms will help you compare loan offers and understand your monthly costs.

• Interest Rate: The percentage you pay to borrow money each year. The Consumer Financial Protection Bureau defines it as “the cost you will pay each year to borrow the money, expressed as a percentage rate.”
• Annual Percentage Rate (APR): This includes your interest rate plus other loan costs, like lender fees. The APR reflects the total cost of borrowing and is often slightly higher than your interest rate.
• Down Payment: The amount you pay upfront toward the purchase price of your home. A larger down payment can often lead to a lower monthly payment.
• Private Mortgage Insurance (PMI): This insurance protects your lender if your down payment is less than 20% on a conventional loan. You can often cancel PMI once you’ve built sufficient equity in your home.
• Closing Costs: These are fees for services required to finalize your home loan, such as appraisals, title insurance, and lender charges. They typically range from 2-5% of your home’s purchase price. Many builders, including Normandy Homes, typically offer closing cost assistance.  Be sure to ask your sales manager for details.
• Escrow: An account your lender may set up to manage payments for property taxes and homeowner’s insurance on your behalf. A portion of your monthly mortgage payment is set aside in this account.

How Much Home Can You Afford?

A great place to start is by calculating your debt-to-income ratio (DTI), which compares your monthly debt payments to your gross monthly income. Most lenders prefer a DTI below 43%.

The Green Brick Mortgage calculator is a helpful tool for estimating your monthly payment based on different home prices, down payments, and interest rates. This allows you to see how each variable affects your overall budget.

Remember to also account for ongoing costs beyond your mortgage, including property taxes, homeowner’s insurance, HOA fees, and maintenance.

Get Pre-Approved to Strengthen Your Position

A pre-approval letter from a lender shows you’re a serious buyer with financing ready to go. To pre-approve you, a lender will review your credit, income, and assets to determine a loan amount you may qualify for. This important step allows you to shop for your new Normandy home with confidence and act quickly when you find the perfect one.

Ready to Take the Next Step?

Understanding your financing options puts you in control of one of life’s most important decisions. With the right loan and a clear budget, you are well on your way to owning a home that is crafted for the way you live.

Explore your financing options with Green Brick Mortgage today and take the first step toward owning a classically inspired, thoughtfully designed Normandy home.

Discover our communities and find the home for you today!