Many people have been in the same situation you might be in now, feeling the thrill and trepidation of building the home of your dreams. One of the most important things you can do when building your own home is to understand the financial minutia associated with the process. This article will aim to leave parents more informed about the process of getting a custom home built.
Many families are starting to realise that the cookie-cutter mould of the average house doesn’t give them everything they want from a home. Being able to construct a home that fits your needs rather than shape yourselves around your house is leading many parents to set out on the journey of building a custom home for their family. However, constructing a custom-built home isn’t a financial undertaking to engage in lightly. This article will attempt to provide an understanding of some of the costs associated with custom-built homes as well as options for financing the entire endeavor.
Key cost factors in building a custom home
There are a number of significant expenses that you should be aware of right from the beginning of building a custom home. You need to acquire some land for the home to be built on and then pay fees to have the architectural design of your dream drawn up. Of course, there are construction and labor costs that you should expect to be sizeable and take the lion’s share of your budget after the land acquisition.
You also should keep a decent amount of money set aside as an emergency budget for any hidden or unforeseen costs that might occur. Things like permits and inspections can incur expenses that might not be immediately apparent. By building a good relationship with the professionals that you contract you should set yourself up to remain informed and receive good advice throughout the entire home-building process.
Financing options for custom homes
Just as with all financial decisions, financing a custom-built home should be taken seriously and looked at as a significant investment that requires careful planning. Obtaining a construction loan could provide funding for the building purposes that you need. The great thing about construction loans is they can often be used to cover the purchase of the land that you plan to build on. Often these types of loans can be set up so that when construction is complete they become a more traditional mortgage.
These construction loans often offer interest-only payment options while construction is underway, meaning that you won’t be bleeding finances while your house is being built. As the loan transfers to a mortgage when the property is completed these loans not only offer flexibility while your home is being constructed, but they also become very affordable once the construction is completed.