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Building A Home vs Buying A Home – What are my options?

When you are ready for a new home purchase, one of your considerations may be whether to build or buy an existing home. While the housing market typically offers a wide range of home styles, price ranges and locations, you might decide that you would prefer a home customized to your individual needs. Whatever your choice, NCCFCU has a mortgage loan product that will work for you!  

If you choose to purchase an existing home, we have several mortgage products to choose from:

  • Conventional mortgages are home loans that are not insured by the federal government.  First time home buyers can pay as little as 3 percent down, while the standard down payment is 5 percent.  The overall borrowing costs tend to be lower than other types of mortgages, even if the interest rates are slightly higher.  There is no PMI once you’ve gained 20 percent equity.
  • FHA mortgages are backed by the FHA, and they help make homeownership possible for borrowers who don’t have a large down payment saved up.  They require a 3.5 percent down payment.  FHA loans require two mortgage insurance premiums: one is paid upfront (which can be financed into the loan), and the other is paid for the life of the loan if you put less than 10 percent down.  
  • USDA loans help moderate to low income borrowers buy homes in rural areas.  You must purchase a home in a USDA-eligible area and meet certain income limits to qualify.  This loan product does not require a down payment.  USDA loans require a guarantee fee upfront (which can be financed into the loan), and a mortgage insurance premium paid for the life of the loan.
  • VA loans are offered for members of the US military (active duty and veterans) and their families.   No PMI or down payment is required, and closing costs are generally capped, however a funding fee is charged which can be rolled into the loan.

If you choose to build your dream home, we have an option for that as well.  We have a One Time Construction to Permanent loan product which is very beneficial to many borrowers.  Unlike other construction loans, there is only one closing, which happens prior to construction beginning.  After closing, funds are available to the contractor to draw down for the construction process.  Once the home is finished, the loan can be modified instead of the borrower having to pay for another closing.  This product can potentially save you thousands of dollars in duplicate closing costs when compared to closing the construction and permanent loans separately.

How do you begin the mortgage process?  Call to make an appointment with one of our Mortgage Loan Originators, or complete the Mortgage Pre-Qualification application on our website,, and we will contact you.  We will be happy to help you select a mortgage product that is most appropriate for you and work with you on pre-qualification for that product. 

We will be happy to assist in any way we can to help you make your dream home a reality!