Have you ever fantasized about building your own home? How about building something customized just for you and your family? This is a great time to bring that fantasy to reality. In many parts of the country, home prices are very affordable. Labor and construction costs have stabilized, and interest rates are near historic lows.
If you decide to take the bold step of building your own home, here are a few things to keep in mind.
CUSTOM OR NOT
Your first step is determining which kind of builder you want: custom or production.
Both builders have advantages and disadvantages.
Production builders are the most popular. Many people believe that production builders are affordable and fast. These builders have several floor plans they use and some level of interior and exterior customization. When using them, you may be limited in the location of your home, how much the floor plan can be customized and the kind of quality you can expect.
With a custom builder, your limit is only your imagination and budget. While a custom home can cost more than a production or “tract” home, buyers prefer it because they can build on their own land and decide every single aspect of the construction process.
Depending on your situation, you may need to secure construction financing in order to build your home. Construction financing usually consists of more than one loan. One loan will pay for the construction itself — often releasing money to the builder in stages as processes are finished — and then converting it to a permanent mortgage once the home is completed.
Do some comparison shopping at banks, credit unions and mortgage brokers for the best financing solution. You can also ask your builder for recommendations. He will likely have some options because his livelihood depends on his clients securing financing for construction loans. Your builder may even help you avoid pitfalls.
THE BEST BUILDER
When selecting a builder, the most important factor is a good, proven reputation. High-quality builders are known for reliability and craftsmanship. They have likely worked in construction for years. Drive by some of the homes they’ve built and, if possible, talk to their owners to get an idea about what you can expect. Check for flaws in the buildings such as cracked walls, leaks and gaps in the work.
When you find an outstanding builder and line up a good financing plan, then you can watch your dream home become a reality.