Building a home is a big deal in a lot of ways. It can be exciting and overwhelming and sometimes, people get wrapped up in paint choices and flooring selections instead of looking at he big picture. Before you make the important step of building your first new home, however, it’s important to take the following items into consideration.
What Can You Afford?
It’s important to carefully determine how much you can afford based on your current income and household expenses. The Federal National Mortgage Association recommends that your monthly mortgage payment, including all property taxes and insurance, should not exceed 33 percent of your gross monthly income.
What Kind of House?
This is the fun part of home construction—deciding on the type of home that you want to build. There are several styles available such as a two-story, split-level or ranch and an architect can design or tweak an existing plan to meet your needs and desires.
Another option to take into consideration is whether you want custom home construction or production home construction. Custom homes are custom built especially for each individual homeowner, while production construction is based on one of several production designs for a particular neighborhood.
Finding Your
Lot
Once you have decided upon the home design, it’s time to look for a lot. This is where the home construction begins so make sure that you pick the right spot in the right community or subdivision. You can choose to look for a lot before or after the home design is finalized.
Choosing a House Plan
Designing the home plan is the most important and the most complicated task in the home building process. You’ll need to be as detailed as possible including the number of rooms and type of windows, doors, flooring, trimming, heating, cooling, etc.
Finding a Home Builder
After having your home plan reviewed by an architect or home designer, it’s time to hire the best contractor for your building project. It’s best to make a list of possible contractors and then schedule some in-person appointments so that you may interview each prospect. These are some questions you may want to ask:
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What type of home design do you specialize in?
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Will you be the one supervising my home construction or will someone else?
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When can you start on my home?
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How many other homes will you be constructing at the same time?
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Will you be performing all the work yourself?
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Do you have any references?
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How long will the construction take?
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What kind of communication will we have throughout the process?
When you’re done interviewing, look over your notes and ask for bids. If the homebuilder of your choice bids too high, negotiate and then decide if the higher price is worth it.
Arranging for Financing
Once the bid has been finalized and accepted, it’s time to secure financing. When you apply for your mortgage, you’ll likely need the following information:
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Addresses for two full years
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Gross monthly income
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Two years 1040 tax returns
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Proof of pensions, retirement, disability or social security
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Proof of rental income
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Proof of child support or alimony
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Year-to-date pay stub
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Information on the property
Once all those preliminary steps are out of the way, it’s time to build! That’s when the fun begins and you get to see your dream become a reality. From the ground up, there’s nothing like watching your first new home take shape.
When you build your first new home, keep the following tips in mind:
- Have an idea of your budget before you talk to the builder
- Create a notebook of photos and ideas of homes you like so you’re prepared for your planning meetings
- Decide if you want a custom or production home
- Interview your builder and ask to see examples of his/her work
- Communicate throughout the process
