Time to dream

One of the advantages of building a new home is that you can shoot for the stars and then scale back from there. Find an architect and use some out-of-pocket money to get started. When you go for your new home mortgage, you can simply build that cost back into the loan. What you are trying to do here is have a fairly realistic idea of what the new home mortgage will likely be.

As you go about the design process, think a bit about what is going into the home so you can use those features as selling points for the new home mortgage. Will the new home take advantage of tax credits, will it use "off the grid" technologies like solar or are all the mechanicals the most efficient. Each of these ideas will boost the innate value of the home meaning it may resell more easily. Remember, the bank wants it to sell when you are ready, so its money comes back easily.

The big little things

If this is the first time you have built a house with a new home mortgage, be sure to think about some of the things that you have never had to think about before. The sewer connection needs to be built. The electric may need to be brought in quite a distance. If the home is to be off the beaten path, this may start to add up in cost making your new home mortgage a bit larger than you may have thought. This is why "off the grid" is such an important concept for not only you but the lender.

Use your equity

As you go about the process of figuring out what you want to go into the house, think about how you are using your built up equity. How do you want to use the equity as it applies to your new home mortgage? Should you roll it all into the down payment on the new home mortgage or should you hold back a portion just in case an extra feature was forgotten in the house.

Are you in control?

In today's lending market, you will really have to have your ducks in a row if you want to follow the new home mortgage route. A lender may be apt to say that there are so many homes available that they would rather a traditional existing home mortgage then a new home mortgage. It is up to you to demonstrate that you have the capacity to support this mortgage plan with your history.