Step 1- Get Funding

Before you buy land or choose a house plan, it is important you know how much money you can borrow. Your financial institution will do a credit check and tell you how much you are qualified to borrow. This is crucial because if you can only borrow $250,000, you cannot build a home that costs $500,000.

Also, when financing the construction of your home, consider the different options you are given. You can choose a traditional construction loan or a permanent construction loan. In a traditional loan, you will take out one loan to finance the construction of your home and then roll that loan into a permanent financing loan or mortgage (two-time close). In a permanent construction loan, all of the costs are tied up in one loan (one-time close). The advantage of getting a traditional loan is that if you go over budget on the construction of your home you can roll those extra costs into the next loan. On the flip side, the advantage of permanent financing is that you only have to pay the closing costs once. Weigh each option and choose the loan that works best for you.

After qualifying for a loan, you will be asked to bring in a breakdown of the construction of your home. This breakdown includes a detailed list of all of the trades needed to build your home; i.e. plumbing, electrical, roofing, etc. Each trade will be allotted a certain amount of money based on the structure and design of your home. Once the cost breakdown has been set, do your best to stay within the allotted budget. Unless you hire us as a general contractor, it is your responsibility to take an active role in the management of your finances.

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