Owning a home is a significant milestone in life. However, before getting there, potential homeowners have to struggle with a critical question. Do you buy or build?
The latest population survey revealed that homeownership rates have risen to 65.3%. Building your dream home allows having a say in every step of the process. Unfortunately, it also comes with its fair share of challenges. Continue reading to know how you can stop the construction from causing you sleepless nights.
1. Get Your Finances in Order
Financing is the biggest headache when planning to build your home. According to a survey by the National Association of Home Builders (NAHB), the average cost of building a 2,776 square foot home is about $ 427,892. Unfortunately, not everyone has that kind of money just lying around. The good news is that this is just a minor setback. You can get financial assistance from lending institutions in the form of home loans.
Traditional mortgages are not an option when you are trying to build your own home. You will need to apply for construction loans. These attract higher interest due to the risks associated with construction. To secure this kind of loan, you must provide a detailed construction schedule along with quick estimates of the total costs. In addition to the plans, you also are ready with a 20%-25% down payment. On completion of the project, you take out another loan to repay the first one or refinance the loan into a permanent mortgage.
2. Choose a Contractor You Trust
Most of the stress associated with building a home is due to the fear of the unknown. You get some peace of mind when your contractor is trustworthy. Choose a company with experience and a proven track record. It is especially important because you will need to prove to your lender that you have a professional builder involved in the project.
Your contractor is required to draft a quotation. It is used by the lender to determine your qualifications for a loan. An inaccurate quote can make you miss out on the financing. To avoid hiring quacks, visit www.costcertified.com to find a certified contractor in your area.
3. Get involved
The best way to protect your investment is to get involved. You can do this without getting in the form of your contractor. The first way to do this is through site visitations. Make it a point to attend all construction meetings to get progress updates of your new home. You can be there during all milestones, such as framing and plumbing.
You are free to ask questions and bring up any issues while visiting the site. The second way to get involved is by staying in touch with the construction team. Request for progress reports at regular intervals to verify if the description matches what you saw at the construction site. Both site visits and reviewing progress reports will put your mind at ease for the duration of the project.
Final Thoughts
With proper financing and the right contractor, building your dream home can be a fun experience. Be prepared to get involved to make sure you get value for your money. Otherwise, building your home is a worthwhile investment.
