Building a home of your own that is designed to suit your needs perfectly is a dream that many of us have.
Imagine having a kitchen that’s the perfect layout for entertaining and cooking or being able to include quirky features that are personal to you.
It’s also something that doesn’t have to just be a dream! With careful planning and budgeting, you could make your dreams of building your own home a reality.
As with any large-scale project, the first step is to calculate a realistic budget.
If you can keep construction costs down by doing a lot of the work yourself, and you don’t go too wild with expensive fixtures and fittings, it’s actually possible for . In fact, it’s estimated that you could save up to $7,000 by building a property yourself.
This isn’t guaranteed, though. Often the loans you will need to build a home will be more expensive than a traditional mortgage, and there will also be additional permits and hidden costs that you wouldn’t get if you bought a house.
That said, if you were going to extensively remodel a house that you bought, this could cost you more than if you were to just build the home you wanted from the start.
It’s important to think about exactly what you want and ensure that you include everything when you make your budget.
Next, you will need to find some land to build on.
Try finding areas where there is land for sale by using either traditional property websites or by using specialist land websites.
It can also be worth speaking with builders in the area, as they will often have a professional network who can give them information on land that is for sale and not necessarily listed in the usual places. They can also give you invaluable advice about the build itself.
When financing your build, the traditional method is to take out a construction mortgage, which usually requires a sizeable down payment and a good credit score.
A construction mortgage is usually granted for the duration of construction, after which it converts into a traditional mortgage.
Another option available to you is , which are loans given specifically to cover building costs. They wouldn’t convert into a traditional mortgage when the loan term is up; you would need to keep up with repayments or clear the loan when you sell the property. For this reason, this type of loan is often used by people investing in property.
A great way to save money when building a house is through sweat equity, which means the work that you do yourself.
When considering whether to use a contractor or carry out work yourself, it’s important to consider how skilled you actually are. Generally, a contractor will be able to provide a high standard of work, and that’s important if you want a robust home.
Additionally, you should think about the hourly rate you charge at your job. If your hourly rate is higher than a contractor, then it may make more financial sense to hire a contractor so that you don’t lose income.