If you are struggling to find the perfect existing home to buy or you truly want to live the American Dream, building your own home is a great alternative and is easier than you think!
First, there are 4 key questions to answer prior to planning a new home construction project.
Who will design and build your home?
Where will you build your home?
How much cash and or land equity will you need?
How much money can you afford to borrow?
The latter two questions in combination will help establish the total budget for your project.
Building your own home from the ground up is a very personal and sometimes emotional undertaking. Consider that you will be working very closely with your builder for a year or more so this initial decision is critical to the success of your project and your emotional well-being along the way. Finding an experienced custom home contractor that you are compatible with should be your first priority. It is always best if the construction firm you select will also manage and consult with you on the design of the project. This as often called “Design and Build” services. This frees you from the responsibility of managing an architect and dealing with the local building department for project approval. This turnkey approach has proven to be the most effective for those considering custom home construction as an alternative to purchasing an existing home.
Getting your building partner involved early in your planning cycle will help in a number of ways. Your builder can help you evaluate the suitability of a lot you may already own or one that you are considering. A contractor that is well established in the area should also be aware of available land that will fit your project parameters. Additionally, when it is time to shop for financing, having a well-respected, local builder already identified will help expedite loan approval.
Once you have narrowed down the candidates to build your home it is wise to have a general conversation about your project. Before entering the design phase you need to establish a range of project costs based on the basic parameters for your home starting with overall size and architectural style. Next, the number and type of rooms desired needs to be determined and depending on the land under consideration, a single level or a multi-level design. Based on these factors a Custom Home Builder should be able to prepare a preliminary estimated range of costs for your project. Bear in mind that construction costs per square foot can vary widely depending on your location, architectural detail and the finishing materials used.
Now, prior to entering the detailed design phase of your project it is time to shop for the financing of your home and to get pre-approved for a loan. There is no reason to spend money designing a house that you cannot afford to build!
Just like selecting an experienced builder, partnering with the right lender that will take a personal interest in your project is also critical. By working with an experienced Construction Loan Advisor you can establish a budget for your new home and determine the cash and or land equity required to get started. With a pre-approval in hand and the affordable range of project cost determined, you can now instruct your Design & Build partner to start the floor plan and architectural drawings for your new home within these financial parameters.
Watch for our next post on Building your own Custom Home where we will discuss Construction Financing options in more detail and your steps from Final Design to Move In!