Building a home is a great undertaking, and the joy of living in your dream house is worth the work involved. To begin to prepare financially you must understand the cost to build a house. Here are five strategies for determining the cost to build a house:
1. Research the cost to build a house
Talking with both a custom homebuilder and production builder can give you a better idea of the total cost to build a house. Generally, custom homebuilders tend to offer more options and features, and this comes with a bigger price tag. Both builders may offer abnormal home shapes, but unique homes require more materials and labor, and are therefore more expensive to build.
2. Review your finances before breaking ground
By carefully examining your financial situation, you can create a budget to match how much you can realistically afford. Once you know how much you are willing to spend, bring your plans to your chosen builder to see if they can produce your vision with this amount. If you feel that you are unable to afford the features you want most in your home, hold off for a year and revisit after building your savings.
3. Meet with an experienced loan officer
Finding a mortgage loan officer with construction financing experience is vital when building a home. Your loan officer can not only help you determine how much you can afford and the cost to build a house, but they will fit you with the home financing you need to keep your project running smoothly.
4. Consider the cost of location
Whether you are building in the suburbs or a secluded lot, you need to review land preparation costs with your builder. If there is extensive tree removal or drainage required, the cost to build a house increase.
5. Be prepared for hidden costs
It’s important to remember that the estimated cost to build a house quoted by your builder may not include the added fees associated with the building process. Costs such as building permits, rising supply costs, delays due to bad weather and mortgage closing costs are most likely not listed in your estimate.
By researching the cost to build a house, reviewing your budget, working with an experienced construction loan officer and preparing for additional costs you are ready to begin the home construction process. Gaining knowledge about smart budgeting is the first step to implementing a successful home construction project.