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Your Comprehensive Guide to Financing Your Norfolk Home

June 11, 2024

At Norfolk Homes, we pride ourselves on building beautiful, high-quality homes in some of the most desirable communities around Ann Arbor, Dexter, Chelsea, Saline, Marshall and Jackson. With over 30 years of experience in the home building industry, we’ve cultivated a deep understanding of what it takes to create not just a house—but a place you’ll love to call home. As we celebrate National Homeownership Month this June, we want to help more people achieve the dream of owning a home by making the financing process as simple and straightforward as possible—which is why we’ve put together this guide to help simplify the basics of home financing.

Understanding the Basics of Home Financing

When it comes to financing a new home, there are several key terms and concepts that are essential to understand:

• Mortgage: A mortgage is a loan used to purchase a home, where the property itself serves as collateral. This means if you don’t keep up with your payments, the lender can take possession of the home.
• Down Payment: This is the amount of money you pay upfront toward the cost of the home. It’s typically expressed as a percentage of the total home price. A larger down payment can often help secure a better mortgage rate.
• Interest Rate: This is the cost of borrowing money, expressed as a percentage of the loan amount. Interest rates can be fixed (stay the same throughout the loan term) or adjustable (change at specific intervals).
• Principal: This refers to the amount of money you borrow from the lender, not including interest.
• Pre-Qualification: This is an initial evaluation by a lender that determines if you might qualify for a mortgage and estimates how much you might be able to borrow. It’s less formal than pre-approval—but gives you a general idea of your mortgage options.
• Escrow: An escrow account is used by the lender to pay property taxes and insurance on your behalf. You make monthly payments into this account, and the lender disburses the funds when payments are due.
• Purchase Agreement: This is a legal document outlining the terms and conditions of the sale between the buyer and seller. It includes details like the purchase price, closing date and any contingencies that must be met.
• Closing Costs: These are fees and expenses you need to pay at the closing of a real estate transaction, which can include appraisal fees, title insurance and legal fees.

Simplifying the Financing Process

At Norfolk Homes, we aim to make the financing process as straightforward as possible. Here are a few steps to help you get started:

1. Assess Your Financial Situation: Before you start looking for a home, it’s important to have a clear understanding of your financial situation. This includes your income, savings, debts and credit score. A good credit score can help you secure a better mortgage rate.
2. Get Pre-Qualified and Pre-Approved for a Mortgage: Pre-qualification gives you an initial idea of how much you can borrow based on your financial information. For a more accurate and reliable estimate, you’ll want to get pre-approved, which involves a lender reviewing your financial information in detail and determining the loan amount you qualify for.
3. Explore Mortgage Options: There are various types of mortgages available, including conventional loans, FHA loans, VA loans and more. Each has its own set of qualifications and benefits. Our preferred lenders can help you navigate these options to find the best fit for your needs.
4. Understand the Purchase Agreement: Once you’ve found your dream home, you’ll need to sign a purchase agreement. This contract outlines the terms of the sale and protects both the buyer and the seller by clearly stating the expectations and obligations of each party.
5. Consider Our Best Rate Guarantee: For a limited time, we are proud to offer a Best Rate Guarantee on new construction or quick move-in homes. This guarantee is based on offerings from one of our preferred lenders with specific qualifiers and terms. Ask our sales team for more details to ensure you’re getting the best possible rate!

Trust our team at Norfolk Homes

Most importantly, it’s crucial to remember that financing a new home doesn’t have to be overwhelming. By understanding the basics and working with experienced professionals like our team at Norfolk Homes, you can navigate the process with confidence. At Norfolk Homes, we’re here to support you every step of the way. Whether you’re a first-time homebuyer or looking to move into a new community, we offer the expertise, resources and commitment to help you find and finance your dream home with ease. Don’t forget to ask about our Best Rate Guarantee to ensure you’re getting the best deal on your new Norfolk home. Happy National Homeownership Month, and here’s to finding your perfect home with Norfolk Homes! To learn more about our new construction homes in Ann Arbor, Dexter, Chelsea, Saline, Marshall and Jackson from a Michigan home builder you can trust—give us a call at (734) 336-1912 or contact us online today!