Home Building in the Current Market

April 5, 2022

With limited supply and high demand in the housing market, I am often asked if it is better to build from-the-ground-up as opposed to purchasing an existing home. Cost is always one of the key factors when buying or building, so it is important to understand your financing options.

In the current seller’s market, most existing homes are sold at prices above their appraised value, even without property improvements. When you choose to build a house, you can budget for the things that are most important to you, such a location and customization.

Your financing plan is key component of the home building process. If you are purchasing land to build on, you will first need to meet with your lender on the lot loan. Goldenwest currently has improved lot loans priced at 4.490% for a 30-year term with a 5-year call with a minimum 20% down payment.

The next steps include selecting a builder and securing a construction loan. Carefully consider your construction loan options to determine which route is best for your situation. Goldenwest offers a one-time close construction loan, which automatically converts to a 7/1 Adjustable Rate Mortgage (ARM) upon completion of the house. The main benefits of the one-time close are: 1) singular application process; 2) one set of closing costs; and, 3) locking-in a long-term loan rate in the beginning – eliminating the risk of rates going up. Currently, a one-time close construction loan with a 7/1 ARM is priced at 3.990% with Goldenwest.

Another option is a two-time close, which requires the home buyer to first apply for a construction loan (with a term up to 12 months), and then apply for the mortgage as the construction is completed. Your long-term mortgage will pay-off the construction loan. Goldenwest’s construction loans are currently priced at a fixed rate of 3.990%.

Many home builders will partner with preferred lenders to help streamline the construction loan and long-term financing process for the home buyers. To provide our members with optimum value in the home building and financing experience, we have partnered with the following local home builders:

• Rainey Homes
• Ovation Homes
• Nilson Homes
• Farr Built Homes
• Bell Built Homes
• Cole West Homes
• Ryan Johnson Construction
• KOZ Construction
• Alta Homes

Goldenwest has local construction loan experts ready to help you with the entire process – from lot loan to dream home. Get a personalized quote on your construction loan in a matter of minutes on our website. Our local experts are ready to answer your call and questions at 801-786-8400, and respond to your texts at 801-893-4928. Or, stop by any Goldenwest or USU Credit Union branch to speak with a construction loan expert today. We’ll take care of you!