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Before you can close on a loan for a new-construction home loan, there’s an extra step where the house must be inspected and deemed safe and habitable. Odds are, the estimates from the appraiser and the builder will be close. And if your build is still in the works, that appraised price could change by the time the house is complete. Here’s what you need to know about getting a loan for a new-construction home—as well as what questions to ask—to keep you on the right path all the way to closing.

It’s a good idea to shop around and compare loan amounts, monthly payments and interest rates from different lenders. You’ll also want to be aware of the cons of personal loans, like the negative impact they can have on your credit score if you fail to make your payments on time. They can also lead to an increase in debt accumulation if they’re paired with other financial products like credit cards and other loans. Most banks will approve a mortgage payment that’s 35% of your gross, pre-tax monthly income or less. For a couple that makes $80,000 annually, this would put their monthly mortgage payment at $1,866, and the total monthly housing payment at $2,133. Finally, you’ll need to put some money toward the purchase of your home, the amount of which will depend on the type of mortgage you get.

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These loans are not secured by collateral and usually come with higher interest rates. Most borrowers of unsecured loans need a higher credit score than for a collateralized loan.

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According to the Consumer Financial Protection Bureau, 57% of all VA loans originated in 2022 were used to purchase a home. To get started, review your state’s HFA website and see if you qualify for a loan or down payment assistance. There’s a housing finance agency in every state plus Washington, D.C., Puerto Rico and the Virgin Islands.

Your financing hangs in a delicate balance of being mutually exclusive and dependent on your current financial situation including your job and even your possessions. For mortgage rates to be more affordable, the Fed would have to start cutting rates, which won’t happen until 2024 at the earliest. The Fed has kept interest rates steady since late July, but mortgage rates continued climbing due to market expectations of further rate hikes. Katherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor’s degree in English literature. Your lender will order the VA appraisal next to ensure the property meets the VA’s Minimum Property Standards and that the amount you’re looking to borrow matches the home’s actual value. If the home is appraised at a lower amount than what you’ve offered to pay, you may need to renegotiate with the seller or make up the difference in cash.

Credit cards are revolving lines of credit with balances that can be paid back over time if not paid in full each month. Consumers with a pricey event like a wedding, a honeymoon or a vacation often take out personal loans to fill the gaps in their budget. Once the event is over, they get the benefit of repaying their loan with fixed monthly payments and a fixed interest rate over time. Use the calculator below to see estimated payments based on loan amount, rate and term. The best personal loans have monthly payments that fit comfortably into your budget. The auto loan calculator lets you estimate monthly payments, see how much total interest you’ll pay and the loan amortization schedule. The calculator doesn’t account for costs such as taxes, documentation fees and auto registration.

To figure out just how much house you can afford, you need to know much your budget can handle on a monthly basis and how much extra debt you can take on. Especially for Millennials who are just beginning to build wealth, a mortgage loan makes the dream of owning a home tangible. Nevertheless, the process of obtaining a mortgage is complex and not one you should enter lightly.

That said, to secure the best interest rates, you’ll need to have good to excellent credit . Of the many varieties of mortgage loans out there, the VA loan—a type of mortgage backed by the Department of Veterans Affairs—just might be the one with the most advantages. There’s no down payment required or mortgage insurance premium to pay. Plus, VA lenders are more flexible than conventional lenders when it comes to credit scores and loan limits, too. Credit cards are similar to personal loans in that they are extensions of unsecured credit. However, personal loans are generally lump sum loans made by lenders to consumers with a specific repayment term and fixed interest rate.

Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. The offers that appear on this site are from companies that compensate us. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. Prepayment penalties — fees for paying off a loan early — are rare, but lenders may charge other fees, including origination and late payment fees. Pre-qualifying with multiple lenders lets you compare estimated rates and payment amounts.

In the case of a mortgage, your home is the collateral, so if you were to suddenly stop making payments to your lender, they could reclaim possession of the house. A mortgage is an agreement between a lender, generally a bank or credit union, and a borrower, like you. Together, you sign a contract, called a mortgage note, which outlines details like the amount of money to be loaned, the term length, the interest rate, and more. The mortgage note is your lender’s written agreement to loan you enough money to purchase a home and your agreement to pay it back. Until you’ve paid off your mortgage, the property belongs to the lender.