Before you Build – 5 Steps to Building your New Home

Before you Build – 5 Steps to Building your New Home
Before you Build – 5 Steps to Building your New Home
May 30, 2016 Russ Busa

Step 1: Plan your Budget

As you prepare to start the homebuilding process, your first step should be determining how much you can afford to spend. Although it seems obvious, many people do not start by nailing down a budget. You will likely need a construction loan and a mortgage and it's never too early to find out what size loan you qualify for.

Don't depend on the advice of friends or family. Talk to your banker, accountant or financial adviser.  They can simply and quickly let you know how much you can safely spend.

As you prepare your budget, in general expect that 20 to 25 percent of your new home project will go toward the land. And don't forget to account for the hidden expenses that aren't included in the building contract (furniture, appliances, landscaping, etc.) Knowing your limits will help you modify your building plans to meet your budget. 
Planning your budget is a critical step in starting off on the right foot with an architect, builder, or any other vendor you will need to work with in the homebuilding process. Doing your upfront research will save headaches later.

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