I have wanted to build a house since I was a little girl, so what luck when I met my husband and he was the same way. We have both wanted to build a house and we have done everything we can to get to the point where we can build a house. The thing about it is, it hasn’t been easy, and it has taken a lot of research, most of which is difficult to find online. That is why I thought I would share some of my experiences and my research.
One of the first things you have to do is to decide who you want to build your house. There are many different options for you to chose from and these will vary depending on your location. For my husband and I, we have three different options to chose from. Now, I won’t get too far into detail about why we picked one over the others, but a few things that will influence your decision is your budget and what the builder offers for your price range. I also suggest that you visit a couple model homes so you can decide of that builder is the right one for you. Lastly, if you are able, try to visit some houses during the construction. Some builders will have open houses to allow you to visit, others you will have to schedule an appointment, while others do not offer this. I suggest you try to visit a couple of houses at different stages during construction so you can see the quality of the house.
The next thing you will have to do is to find out where you want to build the house. If you already have land, that is great and you can skip this step. If you don’t have land, you will need to decided where you would like to build a house, then start looking for land in that area. When looking for a place to build, keep in mind your future plans. Do you want kids? Do you want a place for them to play? Do you like to hunt? Would you like a lot of land or a little? Do you want some wooded land? You also need to think about the house you want to build. Will it fit on the land? Is there a flat area of land for the house to be built on? If you are out of city limits, you will need enough area for a well to be dug and a septic system to be placed. You also need to think about your budget. How much do you plan to spend on your house and your land together. The more money you spend on your land the less you can spend on your house.
Before you buy land, I suggest you have your prefered home builder come look at the land. They will tell you if they are able to build on the land or not. They will be able to give you some idea of what they are looking for in land as well.
The third thing you want to do is get pre-approved for a loan. This will tell you what your budget is. Keep in mind that you may be pre-approved for more than you can afford. If you are pre-approved for $500,000, that doesn’t mean you should spend that much, you need to know what you can afford for a payment. The way a construction loan works is that you pay the interest charges while the house is being built, and once the house is built you will start making mortgage payments. Once you are preapproved for your loan, you can decide how you want to spend the money and divide it between the land and your house.
These three steps can be done in any order, but they all need to be done before moving on.
Once you have found your land, found your builder, and you have been pre-approved for a loan, it is time to start the building process.
You will start by picking a floor plan, then talking with a home builder to customize your home. You will make any changes to the floor plan and pick out all your options from flooring to ceilings. They will also check out your land and determine where they will build the house and the cost of anything extra they may have to do such as laying water or gas lines. Once you have done this, your builder will give you an estimate. You will also sign a contract to lock in the price.
You will take this estimate to your bank, and discuss your options for financing. Many construction loans will allow you to put your land and home on the same loan. This is often the best option because you will have one loan for your house instead of one for your house and one for your land.
When thinking about your financing, you will need to think about your down payment. Honestly, you should start saving for your down payment as soon possible. The bigger the down payment, the smaller your monthly payment will be. Your credit rating will also help determine how much of a down payment you need. Some banks will require a larger down payment the lower your credit score.
Once you have all of that in place, the builder will start the process of building. Once they have started the process, I suggest that you stop by the site as often as allowed so that you can see the quality of work and make sure you are happy with the process.
Once the house is built, you will sign another contract to change your construction loan to a mortgage and yet another contract stating that you are happy with your house.
Once you have signed all the paperwork you will get the keys to your new house and get to move in!
I have not built a house yet, but my husband and I have picked our builder and have a floor plan in mind. We are currently finishing our basement so we can sell our house. Once we are finished with the basement, we will be going to the bank to get pre-approved for a loan. We have some land in mind, we just hope we can get it. We have also been saving up for a down payment.
I have faith that we will get to build a house in the future and I will keep you updated if we do.
Have you ever built a house? Do you have any tips? Do you ever want to build a house?
(To see what else I am writing about for the April A to Z Challenge, check out my first post!)