Higher quality comes at a cost.
Builder upgrades occur when a borrower adds additional features or upgrades their new home above and beyond the original purchase price. This results in more expensive work needing to be done to finish their home design.
Undoubtedly, upgrades can be costly and will increase the purchase price, and ultimately the mortgage amount if not paid out of pocket. So, always stay within your budget on upgrades as you go through the build process with your builder.
Financing Builder Upgrades
Financing these upgrades can sometimes be challenging, especially if the homebuyer is already taking out a mortgage to purchase the home. However, they may decide to incorporate them as part of the mortgage itself.
With a builder upgrade mortgage, the homebuyer is able to roll the cost of their upgrades into their mortgage. As a result, they only have to make one monthly payment for both the home and upgrades. This makes keeping track of their expenses a breeze.
They may also finance their upgrades independently of their mortgage through a separate loan. Alternate loan options include a personal loan, home equity loan, or line of credit.
There are advantages and disadvantages to both, so make sure to carefully consider all your options before making a decision. As well, working with a knowledgeable mortgage professional may help to ensure that the decision you make is well-informed.
At Mortgage Suite, we check your mortgage affordability to make sure no matter the situation, you can still close on your new home.
