4 min read

ellipse icon

Sep 2022

Old House vs. New Construction: Which Is Right for You?




The pros and cons of old homes


The pros and cons of newly constructed homes


Lending solutions for new homes




The pros and cons of old homes


The pros and cons of newly constructed homes


Lending solutions for new homes

When you finally decide it’s time to buy, you’ll need to create a wish list for your future home, including its location, square footage, and price range, in addition to interior and exterior features.

But you’ll also need to decide if an older home or newly constructed home with all the latest features is right for you. A day-one, move-in-ready older home and a customizable, newly built home each have unique advantages and drawbacks, so let's look at both options’ pros and cons.

Older Home Pros

Without question, older homes have a certain charm and character that newer homes simply cannot replicate. Granted, they’ve had the opportunity to build up their personality over the last 75 to 100+ years.

Many older homes have distinct architecture and craftsmanship that you can’t find in today’s homes. Older homes are also typically found in established neighborhoods and communities. And speaking of location, because land was a lot more affordable all those years ago, older homes can have larger yards. That means you’ll have more space for weekend activities, entertainment for your kids, and landscaping projects.

When it comes to financing older homes, you’ll likely pay a lower cost upfront when compared to newly constructed homes. However, the immediate discount won’t always help you save more in the long run if the maintenance outweighs it.

Older Home Cons

It’s true, older homes can be more affordable upfront, but the cost of maintenance is one of their greatest drawbacks. They were built with older materials, so the price tag of repairing or replacing broken plumbing and HVAC units over the course of several years can mount up quickly, and parts can be hard to find too.

Older homes are also less energy efficient than newer homes. Many have outdated windows and insulation that could be in violation of today’s building codes. But more importantly, they won’t retain heat or cool air as well as their newer counterparts. But that’s where renovation loans can help!

What Is a Renovation Loan?

A renovation loan is a resourceful way to upgrade an existing property to accommodate new homeowners’ wants and needs. Anyone with the appropriate credit can take advantage of the loan to modernize an outdated home and make it their own. It transforms the not-so-perfect home you just purchased into your family’s future for the next 30 years.

Maybe you want a suite attached to your home so your mother-in-law has a space all her own. Or maybe you want to install or update the heating and cooling systems so you have the latest models on the market. In either case, a renovation loan would be the answer to your problems. Making accessibility improvements, redesigning the kitchen or bathroom layouts, or, if you obtain the correct medical waivers, installing a hot tub can each be a part of the overhauling completed by a renovation loan.

Repairs you want to see happen are included, too. Fixing your home’s piping to prevent increasing radon levels is an option. No matter the property, a renovation loan spins your recent purchase into your dream home with all the fixings.

New Construction Pros

Today’s new construction homes have more benefits for the buyer than ever before. You decide the amenities and design, and before you know it, you’ll have your dream home built from the ground up. So, what are new construction homes’ major advantages?

First and foremost, they likely won’t cost as much to maintain. Modern plumbing and appliances will be serviceable for many years to come. New construction homes are also much more energy efficient. That means you’ll save more money on your utility bills in the long run thanks to modern building practices.

And unlike older homes, you’ll have complete control over your new home’s customization. Express yourself with finishes and designs on a floor plan that specifically caters to your family’s needs. Although much of the personalization of new homes is limitless, there are still some clearly defined limitations in a few key areas.

Expert Tip

New construction homes may also have possible tax deductions. Mortgage interest and real estate taxes may be deductible, reducing your taxable income.

light bulb icon

New Construction Cons

As exciting as building your dream home from scratch is, there are some downsides you should be aware of before buying. New construction homes tend to have less space outdoors than older homes, which means you’ll have less opportunity to increase your curb and screen appeal when it comes time to sell. And in many cases, new construction homes will cost more upfront than older homes. So, if you can’t afford a new home now, the immediate price drop of an older home might suit your financial situation better.

With less and less space available, builders can’t always construct new homes in areas with amenities, such as a pool, gym, or grocery store, in close proximity. Lastly, you and your agent will likely have less room to negotiate a deal since there is a large demand for new homes.

New Construction Lending Solutions

At Atlantic Bay Mortgage Group®, we offer custom-fit lending for your custom-built home. Our construction loan features:

  • Low down payment options

  • A construction period up to 12 months

  • A streamlined builder approval process

  • No prepayment penalties

  • Extended rate locks

  • One-time and two-time close options

Our construction loan is available to primary residences and second homes. Construction loans are also an ideal fit for borrowers who need to buy land and finance construction, already own land and need to finance construction, or want a loan program that won’t penalize them for prepayment.

For homebuyers who want to build their dream home from the ground up, the Construction Loan Program may be the best option. We offer flexible financing that can take you through the construction phase and into a permanent mortgage once your home is built. If you have any questions about financing a newly constructed home or if an older home is right for you, don’t hesitate to reach out!