Let's Build a Home
1. Get pre-qualified for a mortgage
Whether building a new home or buying an existing home, this first step is the same. By contacting a lender and providing them with some basic information regarding your debt, income and assets, you can find out the size of mortgage for which you are likely to qualify. Then, before that first shovel of earth is turned, you should make sure you get final mortgage pre-approval. This involves filling out a mortgage application and supplying a lender with the necessary documentation to check your financial background and credit rating so you will know exactly how much you can afford to spend.
2. Check the reputation of your builder
Many builders are out there, but not all are created equal. Do a little research to find out which builders have the best reputation. Whether you search for information online or get recommendations from your friends, find out whether a builder is respected for doing quality work as well as being punctual.
3. Be selective about location
The most important thing to decide when building a new home is where to build. What makes the community that you are interested in stand out? Often, new building developments are located on the outskirts of a city or suburban area. It's therefore important to check if the area you are considering is close enough to transportation routes, shopping and schools. Also, find out if the developer is planning to add amenities that will enhance your lifestyle such as walking trails and ponds.
4. Watch your budget
New home communities list a base price for the homes that they offer. However, this is rarely the actual final cost when building a new home. Be aware that you can add thousands of dollars to the base price of a home very quickly if you get carried away upgrading the standard flooring, cabinetry or lighting. It's important to know exactly how much you can afford and to budget accordingly.
5. Build with resale in mind
No matter how much you love the house that you are building, it's unlikely that it will be the last home you will ever own. Knowing that, you should be mindful of its potential resale value. Don't add so many upgrades that you overprice your home for the neighborhood. And don't choose anything too out of the ordinary. Ask yourself if the features you're considering installing are likely going to appeal to others.
6. Know your timeline
Building a new home usually takes many months and lots must be coordinated during this time frame. If you are already a homeowner, your current home must be sold, you must make decisions regarding your new home and you must arrange a new mortgage. Get an estimate of when the building of your new home will be completed and plan accordingly.
7. Be prepared for delays
No matter what time frame a builder gives you, there is always the possibility of delays. Inclement weather, shortages of supplies and labor problems can all factor into delaying the completion of your home. Be aware of this going into the building process and be prepared to be somewhat flexible.
8. Keep a close watch on progress
One way to help prevent delays and mix-ups is to stay involved in the building process. If possible, drive by the construction site to keep track of the progress that is being made. And keep in touch with your builder on a regular basis.
9. Avoid making changes
Try to avoid making changes to your designs once all of the plans have been completed. It will delay the completion of your new home and may add considerably to the final cost.
10. Arrange temporary housing
Chances are there may be a delay between the time you sell your existing home (or the lease expires on your current rental unit) and the time you move into your new home. If this is the case, you will need to arrange some temporary housing. Realize that you may be living there for several months so make sure it will be both affordable and able to meet your needs.