Searching for the right home for your family’s needs and expectations might lead you to consider building your own custom home. Maybe you want a wraparound porch, or an open-space interior design, or a gourmet kitchen. Whatever your dream features are, a custom-built home can turn them into a blissful reality.
As you’re considering building your own home, you’re probably first concerned with ensuring a new construction will fit into your budget. Then there’s finding a lot, an architect, and a builder. It can feel overwhelming, but for many homeowners, any difficulties they face in the process are outweighed by the satisfaction they’ll feel when moving into their very own dream house.
To help you better understand the process of building your own home and help set you up for success, we will cover some common aspects of new home construction that you should be aware of and prepared for as you start your journey.
Prepare A Budget
It will be difficult to move forward with evaluating lots, picking a neighborhood or community, determining supply costs, and selecting a builder without a firm estimate of what is realistic for your budget.
You can begin the budgeting process by using industry guidelines, like the 28/36 rule, which suggests you shouldn’t spend more than 36% of your gross monthly income on debts.
Another major part of your budgeting will revolve around what type of financing you’re able to secure. Getting pre-approved by your lender will provide a clear understanding of how much you can spend on your new home, which in turn enables you to begin locking in other key decisions you’ll need to make.
Don’t Be Afraid to Choose A Builder First
If you’ve got some land lots or an area to purchase in mind and your vision truly requires hiring your own architect to bring it to life, you can follow that path and build an amazing custom home. But, don’t be afraid to research builders and let one help you combine some of those steps on your journey.
Often, builders will have new communities announced or in progress, and those can be a great option for buyers who want custom features but feel more comfortable working from a starting foundation.
If you are leaning towards working with a builder who already has a new neighborhood construction in progress, you’ll want to lay out clear expectations for the custom features that are non-negotiable to you and evaluate their responsiveness to your design ideas as you begin talks with them.
Do Some Homework on Potential Builders
As you narrow down selections for who you’ll hire to make your dream home a reality, you’ll want to conduct online research and talk with previous clients if possible. Evaluate each company’s track record and take a look at their past projects.
It’s normal for any business to have some negative feedback about them, especially in industries like home construction where the work is deeply personal to customers. But if there’s an overall trend of issues, you’ll want to be aware of that before entering into an agreement.
Other aspects to check include their licensing and insurance and what’s included in their home warranty. Completing this due diligence in the beginning of the process can save you big headaches later on.
Finance with a Lender That Specializes in Construction Loans
There are more mortgage programs today than probably ever before. There are first-time homebuyer programs to help with the issues new homeowners face, and government programs like USDA loans to help buyers in rural areas secure financing. With all of the complexities that affect loans on new build projects, we highly recommend working with a lender experienced in construction loans.
Lenders who are leaders in this field can utilize their builder relationships to make the mortgage process seamless. They can also help you understand specific program guidelines and select the best program for your specific financial situation. Whether it’s handling a construction draw or securing a long-term rate lock to protect you from rising interest rates, you’ll be glad you chose a lender with construction expertise. You already have enough decisions to think through without the added stress of learning the ins and outs of construction loans.
We’re Experts on
When it comes to construction financing, we’re the experts. With 25 years of experience, you can trust that your FHM loan officer will have the expertise to help you throughout the entire new build financing process.
Don’t Forget to Consider Resale
While you might be planning to stay in your new custom home for the long term, plans can change. It’s great to have custom features, but if they’re something more out of the ordinary, or not likely to be desired by many potential buyers, you may want to consider how you could change or reinvent them if you need to sell your home later.
The flipside of that coin is that you can also capitalize on unique aspects that aren’t widely available but that have more general appeal, such as a decked-out home office workspace in this new era of work-from-home jobs.
Some features that are known for increasing resale value right now are:
- Kitchens designed for multi-use, including dining, working remotely, and entertaining guests.
- Hardwood flooring or tile, especially for homes in humid climates.
- Spacious and inviting entryway.
- Energy efficient and sound reducing windows.
Overall, you shouldn’t sacrifice the distinctive ideas you’re incorporating to make your custom home special for you, as that’s a major part of the reason you’ve chosen to go with a new construction, but you should always consider your future resale options, as you would with any real estate purchase.
Our team has extensive construction loan experience, and all of our loan officers love to help buyers move into their brand-new custom homes. Put our direct lending model, construction financing expertise, expansive program offerings, and extended rate lock Rate +Plus program to use for you. Connect with us today to get started on building your new home.
The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 8/5/2021.