Where I lend around South Lyon
A builder's purchase agreement is not a resale contract
When you buy an existing home, the contract is a familiar document. Inspection contingency, financing contingency, a closing date everybody is aiming at, and a seller who wants out of the house. Both sides are looking at the same finished building.
A builder's agreement is written by the builder's side and it does different work. The closing date is usually tied to completion rather than to a fixed day on the calendar. Your deposit and your option selections are committed at signing. The financing language can be narrower than what you're used to. None of that is improper — it's how the industry writes these — but it means you sign a commitment to buy before anyone can appraise or inspect the thing you're buying.
So the financing conversation belongs before you sign, not after. Have your agent and your attorney read the agreement. Send me the terms at the same time. I'd rather tell you what the lending side of that document does while you can still ask questions about it.
Your approval has a shelf life. A build usually outlasts it.
Everything in a loan file ages. Credit reports expire. Pay stubs and bank statements expire. Before a loan closes, lenders re-verify employment and re-check credit, and on a build that stretches across seasons, the paperwork you handed over at the start will be refreshed at least once before anyone hands you keys.
That is where new construction files get hurt, and almost always by something the buyer thought was harmless. A job change or a move from salary to contract work. New credit opened for furniture, appliances, or landscaping while the house is going up. A financed vehicle. Large deposits into the account with no documented source. If you're self-employed, a tax year turning over mid-build so a fresh return comes into the picture. Nothing on that list is fatal by itself. All of it is easier to handle when I hear about it first instead of at re-verification.
Rate locks expire too, and a build can run past one. There are ways to handle that, and they're worth understanding at the start rather than near the end. My advice on a build is boring and it works: change nothing you don't have to change until you're in the house.
The appraiser values plans and specs, not a house
On new construction the appraiser often works from the plans, the specifications, the site plan, and your signed option list. There's no finished house to walk. Value gets supported by comparable sales, and there's typically a final inspection once the house is done.
The part buyers don't expect is what happens with upgrades. Options you select at the design stage do not all come back as appraised value. Structural choices — square footage, a finished lower level, a garage bay — generally carry better than finish selections do. Load a modest footprint with enough elective upgrades and the contract can end up ahead of what the comparables support. If value comes in under the contract, that gap becomes something you and the builder have to solve, and by then you've already signed.
Which is why I ask clients to keep me looped in during the selection process. Two minutes on the phone before you sign the options addendum is cheaper than finding out at the appraisal.
Construction loan or end loan — they're not the same thing
People use "construction loan" for both situations and it sends buyers down the wrong path.
If you own or are buying a lot and paying a builder in stages as the work gets done, that's a one-time-close construction loan. It funds the build in draws and converts to permanent financing without a second closing. Underwriting looks at you, the builder, the plans, and the budget.
If a builder is carrying the construction cost on a spec home and you're buying it when it's finished or nearly finished, you're getting an ordinary purchase mortgage — what the industry calls an end loan. It underwrites and closes much like any other purchase. Which one you're in comes down to who owns the land and who is paying the contractor along the way. Worth settling that in the first conversation.
Builders often offer an incentive for using a lender they work with, and that can be a real benefit worth weighing. It's also worth knowing that the choice of lender is yours. Take the incentive offer, get a second one to sit next to it, and compare the whole package rather than any single line of it. That's your right as a buyer, and any builder used to informed buyers expects you to do it. I'll give you something you can put side by side.
One more thing about South Lyon addresses
A South Lyon mailing address can sit in Oakland County, in Livingston County, or in Washtenaw County depending on which township the property is actually in. That changes your taxing jurisdiction and where the deed records. If you're making it your primary residence, the Principal Residence Exemption takes roughly eighteen mills off the school operating portion wherever you land. I confirm the jurisdiction on the specific property when I quote.
Loan programs I use in South Lyon
- Conventional — low down payment options, and PMI that can come off later
- FHA — more flexible on credit
- VA — the benefit you earned, for eligible veterans and service members
- One-time-close construction — funds the build and converts to permanent financing
- Renovation — 203(k), HomeStyle, CHOICERenovation for the older homes in town
- DSCR and investor — qualified on the property, not your tax returns
- Self-employed and bank statement — for income that doesn't fit a W-2 box
First time buying? Start here.