5 Mistakes to Avoid When Building Your Custom Home

A custom home is different from a resale home or a spec home. As a matter of fact, it’s you who will design the space based on your needs. You can decide on the rooms layouts, finishings style and the building material quality. When taking these benefits into account, make sure that you know the common mistakes of building a custom home. Read on to know how to avoid these mistakes.

#1: Not Knowing the servicing costs

Some people choose their lots prior to building their custom homes. While choosing a certain site, you should take into account factors, such as amenities, waterfront views, and privacy, to name a few. Another important job is to figure out how much you will need to spend to get it ready and then connect it to services.

Keep in mind that the municipal services, such as sewer, water, gas and electricity cost good money. In order to avoid the additional costs, we suggest that you do a feasibility analysis before purchasing a lot.

#2: Imposing a home design

You should not impose a certain home design on your site. Instead, you should adapt a design to it. What you need to do is choose a site with care. If you have purchased a lot already, you should adapt your design to the site idiosyncrasies.

For instance, if you have a lot teaming with big trees, you should adapt them to the design of your house instead of getting them cut down. You can save a lot of money, grief and time by designing a home that respects its environment.

#3: Starting the work before deciding on a budget

Before you start designing, make sure you have decided on the budget. The home design will have a great impact on all the related things, such as interior finishings and exterior landscape. To keep things moving in the right direction, you should set a realistic budget. This will help you and your designer keep connected. And the costs will also stay in your control.

#4: Choosing the wrong home designer

Choosing a custom home design that can’t meet your style needs is not a good idea. Actually, you may want to consult a good builder for recommendations. Once you have made a list of a few designers, you should choose one based on your requirements. For instance, you should consult a good general contractor. He may give you a few good names so you can choose the right professional.

#5: Green building

Do you know what green building is? Even if you do, you also have to know the costs of incorporating the techniques for your custom home. As a matter of fact, green building may help you keep the costs down. For instance, if you employ an engineer, he can help you save money on window orientation, roof overhangs, and heating systems, just to name a few.

So, these are some common mistakes that you have to avoid when custom building your house for the first time.

Contemporary Home Builders – Building Your Dream House Effortlessly

Are you getting excited about building your dream house? Want to make the process easy and stress-free? Why not hire contemporary home builders and avail yourself a number of home designs that not only suit your budget but also fulfill all your specifications!

When you think of building a new abode or renovating the existing one, the first thing that strikes your mind is how to get it done. No doubt, you’ll be thinking of carrying out the complete process on your own as there’s nothing more special than decorating or renovating your home with your own efforts and creativity. Once you finally decide to work on your own and manage your finances accordingly, you must never look back or feel depressed at any instant of time as this will break you from inside and will tear you apart thereafter. If in case, you feel like you are not made for this task, you must hire an expert who will build your dream home based upon your specifications and will carry out all the necessary tasks effortlessly.

Your specifications may include factors like:

Total number of rooms to be included

• Type of furniture to be used

• Type of doors and windows

• Colour of the walls

• Floor ideas

• Different kitchen designs

• Type of lighting to be used

• Carpet colour for your living room

• Bathroom style

• Bedroom design

• Roofing system

These are some things that you must include in your ‘To-Do’ list while narrating your specifications to the builder you hired. Before hiring a builder, it is important that you find out what exactly you want, i.e. what kind of house you are about to build. Once you decide on what home design to choose, you can move on to the next big step, i.e. setting a specific budget. Make sure the design you choose fulfills all your expectations and suits your budget plan too. Moreover, you must choose the right professional who not only carry out the process meticulously but also make sure that your house plan works best for you in the best possible fashion.

Once you give your best shot in order to kick off the renovation process in a well-organized fashion, you must pay attention to certain factors that can play a great part in making the process go a lot more fluently. This is where the importance of an experienced professional come into the picture, so it is important that you pick a perfect consultant or architect to take care of the complete designing process, seek other professional advice as required, take care of the future trends and pick a design accordingly, make a list of all the things that are involved in the process of home renovation, and more.

How to Become a Professional Home Builder – Pitfalls of Contract Building-Allowances

If you’re a contract builder allowances can make or break you and all allowances must be stated in writing. It’s very important that you have allowances for all those items you will not know the price of until the product is purchased or the work is done. It is also very important that you be crystal clear on all allowances.

Give your customer a rough idea of what $4,000 worth of grading will entail. Show them what $350 a 1,000 brick looks like. Show them what $1,000 worth of lighting and $3,000 worth of plumbing fixtures looks like. And show them what $20 a square yard carpet looks and feels like just to name a few.

It’s very, very important that, verbally and visually, you be crystal clear on all these allowances. The thing you don’t want is for a customer to expect $3,000 worth of lighting when you’ve only allotted in the contract $500 for lighting. They’re not going to be happy and they’re going to think you’re trying to pull the wool over their eyes. Then you have problems.

I know a very good contract builder and he spends a lot of time with customers up front going to lighting stores, carpet stores, all these places so the customer is real clear as to what the allowance will cover.

This can be very time consuming and aggravating but in the end it will be another important step to ensure a happy and satisfied customer.

How Often Will I Need to Re-Stain, Re-Chink, Re-Caulk or Re-Finish My Log Home?

Before or after buying your log home there are certain things every log homeowner should know. Some things might be open for debate but one thing is for sure, your log home will require attention. This doesn’t mean that you will spend all of your waking hours staining, caulking, sealing, chinking, re-caulking, re-chinking and re-sealing. It does mean that you will need to pay attention to your log home like you might pay attention to your car. Below you will find some helpful tips and information to guide you through owning a log home.

  1. Have realistic expectations for the maintenance on your log home. There will be some.
  2. Set up a routine log home maintenance schedule.
  3. Follow a routine log home maintenance schedule.
  4. Apply log stain when your log home needs it. Remember you get what you pay for most of the time. Good log home stains are not cheap but you will save you money in the long run.
  5. Good log home stains will offer about 3 years of protection on the southern exposure of your log home and 4 years of protection on the other sides of your home. These figures are just estimates and will vary depending on a number of factors.
  6. Expect to caulk or chink your log home at some point.
  7. Some log homes require more chinking, caulking and stain than others
  8. Almost all log homes require some chinking or caulking whether it be in the horizontal log joints, the corners of the logs or around your window bucks.
  9. As we mentioned earlier, the better the log stain material the less stain maintenance your logs will require.
  10. Design your log home with maintenance in mind. Remember the less exposure your logs take the less maintenance they will require.
  11. Square logs weather better than round logs.
  12. Log home chinking can be used for aesthetic purposes or as a weather-tite barrier.
  13. Log home caulking should typically blend in with your logs. Conceal caulking by Sashco sets itself apart from all competitors.
  14. Some water based log stain materials are very good while others are very bad.
  15. Some oil based log stain materials are very bad while others are very good.
  16. Your log home stains should be compatible with your log chinking and your log home caulking materials.
  17. The preferred time to maintain your log structure is typically during the summer.
  18. Remember you log home is a dream home. Don’t forget to treat it like one.

A Green Home Buyer’s Guide On Choosing An Eco-Friendly Home

Eco-friendly living is the way forward, and it is currently the best time for you to follow this trend. So go ahead and own a green abode that reflects your personality. Below, are a few points that you should consider on your pursuit to acquiring a green home.

Building A Home Vs. Buying One: How Do They Compare?

Every house is energy efficient and eco-friendly one way or the other, which usually saves a considerable amount of money. But buying a home does not give you the freedom to use your own ideas on the house from the ground up, as opposed to building a house according to your plan.

Renovation Can Do The Trick

If you have a non eco-friendly house and you want to convert it into an eco-friendly unit, you can spend money on modifying the house based on your ideas. For instance, you could replace an old light bulb with the latest LED ones, which are proven to consume less energy. Note that reworking on your house could cost a significant hole in your bank account, but in the long run, it is definitely worth it.

Other Important Priorities

Living green will likely be next to impossible, if you are on a budget and looking to stay close to popular hubs. The same could be said, if you want to have restaurants and other recreational facilities around your neighbourhood.

Be Ready To Relocate If Necessary

Is living in an eco-friendly house a top priority for you? If the answer is yes, then you need to consider relocating to a location where it is possible, I.e, a place where there’s plenty of sunlight and a place that suits your budget. But most times, this would mean that you would have to relocate to another region. You would have to settle in an entirely new location, where you will need start all over again, which is a bad idea if you are not looking forward to change.

Get Hold Of A Green Agent

Now that green living is becoming more and more popular, there is a rise in the number of real estate agents specialising in the scouting process of such houses. Get in touch with one of them to get a tour of affordable alternatives that are available.

Although eco-friendly living is a great step towards a self-sustaining life, it also requires you to invest a lot of time, effort, and money that is usually not a sound alternative for working-class families. You should go for this lifestyle, only if you are absolutely sure it is a serious decision, and not just a hobby.

How to Have the Best Home Building Experience With Your Custom Builder

1. Know your builder – It is very important to get to know your builder. Treat your first meeting like an interview. Learn about them, their background, their business, and experience. You are going to be working with this person very closely for the next year, it is important to choose carefully and understand their role in the process.

  • Some good personality traits to look for in a builder: a good listener, a good communicator, honest, and field experience. Make sure you are actually talking to the builder not just the sales person!
  • Think service because ultimately this person is providing you a service. What are your expectations for service during this process? Ask questions that tell you how they provide good customer service.
  • Are they showing a genuine interest in you, your family, and your values? It’s NOT about them, it should be about you!
  • Is the builder being up front about how the process works? For instance, let’s say the good, the bad and the ugly! Are they realistic?

2. Be involved! – This is your home and you’re choosing to build, not buy an already completed home. Depending on how custom you want your home, there can be hundreds of choices that need to be made. Have a realistic expectation of the time that it will take to get it done. In addition, all partners should be involved in the process from beginning to end. This can be difficult as the process is long and everyone is busy. From finding a lot, to picking finishes, or approving the budget, everyone will be happier in the end if they stay in the loop from the beginning.

3. Know and understand your budget. – Make sure your builder goes over your budget in detail and that you understand what is included in each category or allowance. Ask for pictures of what is included and if you don’t like it, tell him. And then ask for a price for what you do like. Try to eliminate the surprises and have a realistic number from the beginning.

4. Have discipline. – The happiest customers are those that stay closest to their original budget. This might be the hardest one because it puts our emotional side against our logical/realistic side! Try to keep your emotions in check. We know that a $6,000 dining room chandler is perfect, and this is the last house you will ever build, but be realistic. How high is it on the priority list? Can it be upgraded down the road? How important is it really going to be in 10 years? We say have a lot of discipline or a big contingency!!

5. Communication – It is important to have open communication with your team. That includes you, your partner, your builder, your designer, and anyone else involved in the process. Learn early the best way to communicate with your builder and stick to it. Remember, many builders are running multiple jobs or spend most of their time in the field. Try to write down and save up your non-urgent, important items and communicate them all together. Realistically you should be talking to your builder 1-2 times per week throughout the process.

6. Always keep your eye on the ball. – Stephen Covey said “start with the end in mind,” and that is the “ability to envision in your mind what you cannot see with your eyes.” This does a great job of summing up the home building process. Remember what your goal is: to have a beautiful, unique, new home that you designed and helped build! It is a very rewarding process to see a home come together in a place, where just weeks before, was only earth and trees.

7. Enjoy the process and the outcome! – This may be the only time that you build a custom home. By following these tips hopefully this will be an enjoyable experience and one that creates memories that last a lifetime.

How to Estimate the Cost of Building a New Home

This will serve as a help guide by providing some tips and techniques for estimating the cost of building a new home. As an expert residential estimator there are many things to consider before you begin estimating.

Construction estimating can be difficult and it does require a high level of accuracy and detail. It also requires good math skills and a little geometry knowledge. It requires the ability to read and understand construction drawings and details and how they are applied. Basic construction knowledge helps and being familiar with the local building codes.

You may want to enroll in a construction estimating course at the local college or technical school. Another option is to purchase an estimating manual from your local bookstore or go to estimating.org which offers online courses and has a bookstore.

One of the rules that I have learned along the way is the old saying, “measure twice cut once.” Whenever I do a takeoff or an estimate I always follow this rule in order to help minimize mistakes.

What will you need to put an estimate together?

You will need a notepad, a calculator, an architectural scale, and an engineering scale. These are the basic tools you need to put an estimate together.

Architectural & Structural Drawings

Now you are ready to open the plans and begin to review them. The easiest thing to do is look them over and get a feel for the basic building concept. You should get familiar with the information that is contained on each sheet.

Most construction projects have a set of architectural drawings and a set of structural drawings. I will explain the difference between the two.

It is important that the plans are to scale and have all the required details and wall sections needed to properly estimate from.

What is typically included in a complete set of architectural plans? The drawings at a minimum need to contain the following sheets: a title/cover sheet, a site plan, a floor plan, a foundation plan, four elevations, a roof plan, an electrical plan, a sheet with a typical wall section, a sheet with the window and door schedules, and a sheet with the necessary building and architectural details.

The structural drawings are drawn by a structural engineer, not the architect, unless the architectural firm has an in-house engineer. Any interior shear wall or bearing wall is detailed on these drawings.

The engineer calculates all the uplift and bearing loads of the roof trusses on all the interior and exterior. After doing the calculations they determine which walls are shear or bearing or both and what is required to properly support those uplift and or bearing loads. The engineer will put a structural note on any wall that is bearing or shear. The note will indicate the sheet number and detail number illustrating how that wall needs to be built.

A load bearing wall for example could have a thickened concrete footer with two pieces of steel and the wall above it may need to be framed out of southern yellow pine versus spruce with special metal hardware. These should be highlighted on the plan so they will not be overlooked. Sometimes the hardware called out by the engineer is a special order and can take several weeks to get. So if you wait until the framing package needs to ordered and there are a two or three shear walls with special order hardware it could delay the construction.

You need to make enough copies of the architectural and structural plans for multiple subcontractors and suppliers bidding the job. To save you money, ask your architect and engineer to convert the drawing files to a PDF file. This will save you time as well and make it convenient because you can email them to as many subcontractors and vendors as you like.

Specifications

A list of product specifications must be provided so all the subcontractor and vendors are bidding apples to apples. This is a list detailing all the products and finishes you want in your new home. It does not make sense to send the plans out to bid without a set of specifications. Without this, the bids you receive will not be apples to apples. Then you will need to have them all rebid the project. It wastes a lot of time and creates a lot of unnecessary work for the subcontractors. Remember these guys do not need practice bidding and some of them may not submit a bid without a set of specifications included. Therefore, everything from paint colors to the floor finishes need to be selected. They need to be listed on the plan or on a separate document.

Doing the Takeoffs

It is too technical to put in a written guide how to quantify the concrete, masonry, lumber, and shingles just to name a few. For example let’s assume you need to quantify the masonry block on a single story block home. You have to know how the wall is assembled which includes the ability to visualize and understand construction methods. If the exterior walls have multiple heights, a regular block (8x8x16) needs to be added and a lintel block needs to be deducted in each location where the plate heights change. If some of the walls are on a 45 degree angle you need to be able to know whether to estimate an angle block or butterfly block. The door and window openings need a certain quantity of regular blocks deducted plus a half block every other course on each side of each opening. You could have too much of one size block and either not enough or some units not accounted for at all. These inaccuracies will throw off your budget and cost you time and money. This ability and knowledge can not come from a book but through hands on experience combined with years of estimating experience.

If you decide to quantify the materials yourself I suggest you refer to Walker’s Building Estimator’s Reference Book, frankrwalker.com which has instructions on how to estimate the quantities of concrete, masonry, lumber, drywall, etc. It is considered the bible for construction estimators and it is one of required books included in the study guide for most state contractor’s exam. Just keep in mind that these reference books do not have tips and tricks as well as real world experience as explained above.

You can employ the help of your subcontractors bidding the work or your suppliers. You may pay more for their product or service or you can hire us. Either way you are paying for someone to review the plans and quantify what is needed to build the project.

If you have your lumber yard quantify the material remember he is trying to win the job so he may provide a takeoff that is too tight. This does not benefit you if you have to keep reordering more lumber. The obvious answer to this is to have your framer put together the lumber list for you. Well that does not work either because he will over order so he does not run out of material and have to make additional trips to finish. They want to finish as fast as possible so it can get inspected and they can get paid. The bottom line is neither are working in your best interest.

I recommend you do not attempt to quantify the materials yourself. I have outlined valid reasons why. It is very technical and requires someone with years of estimating experience combined with hands on field experience.

Soliciting Bids

This part of preparing an estimate can be done by most anyone. I suggest you contact your local builder’s association to get subcontractor referrals or use Angie’s List, angieslist.com which prescreens contractors as well

You may have heard the term RFQ – Request for Quote. You want to solicit at least contractors. Most people will say three bids, so why do I recommend five bids? Let’s say you contact five contractors and all five contractors bid the project. You got to figure one will be the high bid and one will be the low bid. So those should be set to the side because chances are the low bid is probably missing something and the high bid is priced too high. The remaining three bids should be reviewed thoroughly to make sure you are comparing apples to apples.

When you contact all the subcontractors that you want to bid your project be sure to give them a bid due date. That way you do not have to chase them. Give them a reasonable amount of time to review the plans and specifications, typically a week or two.

Analyzing the Bids

First organize all your bids by trade, such as putting all your electrical bids together. A three ring binder with dividers and tabbed with each category is a good way to organize all the bids.

Once you receive the bids you need to read them carefully and review them against the plans and specifications. They should have the project information and the date. They need to be detailed and itemized. The cabinet bid should not say “cabinets”. Instead it should list and quantify all the cabinets by finish, style, size, and location, example 15 lnft of 42″ oak raised panel kitchen cabinets, 1/ea 60″ melamine master bath cabinet, 1/ea 36″ melamine hall bath cabinet, etc. If it does not include the countertops it should state that so there is no misrepresentation.

When a proposal needs to be revised, make sure it states the revision date or states “revised”. That way when you compile the bids and you need to refer back to them you will be looking at the latest one.

The proposals should also indicate workmanship and warranty. All this is important, especially if the contractor does not perform and mediation or worse litigation is required.

How to Negotiate the Best Price

Once you determine the three competitive bids the hard part is negotiating with the contractors. You have to assume that all the quotes will be inflated with the understanding you will negotiate less. Therefore, you need to get them down as low as you can to the real number. I always ask my subcontractors and vendors if the bid is negotiable. Remember it never hurts to ask, the worse they can say is no. And if they say yes, then I ask them what is the maximum they can cut their bid. They normally respond with, “how much do I need to cut it to get the job” and again I put it back on them by saying, “the maximum you can cut your price”. Never name a price first! You should already have a budget of what you can afford to spend on each item. You never know whether or not they would be willing to do it for less than that.

Once they lower their bids and you determine the low bidder you need to compare warranty, workmanship, and references. Price is important, but if they can not finish the job the price does not mean anything. You definitely need to check both project references and credit references. The bottom line is you want the best contractor for the least amount of money.

Preparing an Estimate

Once you have awarded the job to each subcontractor you will want to prepare an estimate. I recommend using Microsoft Excel to organize your estimate. It is the easiest and mostly widely used spreadsheet application, especially in construction.

It helps organize your estimate. You can use a separate worksheet for each trade within the Excel workbook. You can enter all the material lists and bid amounts you receive. You can track the job to make sure you are on budget. You can email your local suppliers your material lists so they can enter their unit prices and they can email it back to you.

One of the sheets needs to be the estimate summary which has the total cost for each phase or trade. It should include your preconstruction costs and direct construction costs.

It should have the estimate total at the bottom.

There are endless possibilities you can do with Excel and the level of detail is up to you.

We have for sale blank estimates that are in Excel. These are templates that we use which can help you calculate some of the material quantities and can also be used to prepare your estimate. They contain prebuilt formulas for calculating concrete, steel, masonry, and lumber. All you need to do is enter counts and lengths where indicated and the quantities are calculated for you. Contact us to send you a sample template.

Conclusion

I hope this has provided you will some good information on how to prepare an estimate if you are building a new home. We are available to answer any questions you may have. We can help you put together an estimate for any type of construction project, big or small, residential or commercial.

Home Renovation And Reconstruction – How To Do It The Budget-Friendly Way

When you buy or construct your home for the first time, everything seems perfect and flawless. The decorations are perfect and the space appears enough; in fact, you can’t take your eyes off the new walls and furnishings. However, as time passes by, it starts showing its signs of wear and tear on the structural conformity of your building. Whether you intend to stay in your house for a long time or sell it off in the near future, property maintenance works are a must. However, considering the present hectic lifestyle and work schedule, it’s pretty natural for you to go easy on home upkeep jobs. Over time, your negligence starts showing its results on the aesthetic look of your property. Of course, it’s advisable to be on the safe side with maintenance jobs, but renovation works often turn into a thing of priority.

Property refurbishment or home renovation is an excellent way to improve your lifestyle and lower the utility bills. Nevertheless, the huge expenses of house revamping projects deter many people from undertaking these types of construction projects. Yes, property renewal or reformation is not just about painting the walls or replacing the furniture; quite often, it’ll include some construction works as well. Even though the basic material and labor costs often remain the same, you can lower the overall expenses by choosing cost-effective fixtures, lumber and other facilities. Following are a few tips that’ll help you in renovating your house in a budget-friendly way.

Plan a proper budget

Of course you’ve heard it many times, but the drafting of a budget for your property revamping project is very essential. If you choose to work without a budget, you may end up spending more than what you would otherwise do. When opting for renovation projects, proper budget creation is a must. Assess the estimated costs, including the materials, permits, labor and so on. What’s more, most of the home refurbishment projects go beyond the budget. Therefore, always add 15 percent to your estimated cost.

Opt for discounted shopping

Just because you’re trimming down your reconstruction expenses doesn’t mean that you’ve to compromise with the quality services. As you take the initiative to renovate your property, make sure that you keep a track of the discount offers made by the local stores. From through professionals to handyman services, you must consider all the available options on hand. Quite often, it’s seen that the construction companies offer special concessions on their service fees. While most of these offers are genuine, scams or deceitful tactics do exist in the market. So, it’s very important to remain cautious when hiring a construction company for your renovation project.

Green Building – Sustainable Materials For Home Construction

There are prominent issues in the contemporary society especially those that tackle the massive impact of things in the environment. In the real estate industry, preferring technologies and systems that cater to the preservation of the environment is becoming a trend. One of the concerns prevalent today is on the use of sustainable materials for home construction.

There are innumerable criteria you can actually consider when talking about sustainable materials and how such items are qualified under this category.

One of the main properties that sustainable and green buildings must be eligible with is its less environment impact. Since such real property entities account for many effects on the use of land, water and energy consumption as well as the alteration in the air and the atmosphere, buildings must primarily reduce its consumption of natural resources which are slowly depleting and eliminated without chances of renewal.

Sustainable materials are the ones that are recycled and reused in order to build or renovate homes and buildings. This way, you are not contributing to the exhaustion of the natural resources in order to answer the demands for new materials and items to use for construction and renovation of your property. There are numerous industries in the world of real estate that cater to the notion of recycling and refurbishing materials instead of producing new ones for constructing new properties or improving old ones.

In general, bear in mind that the process of building construction is definitely producing a lot of wastes. Hence, the materials that are recycled and reused must have the ability to reincorporate whatever scraps or wastes are made and remixed or reused it for other building construction purposes.

Another important criterion to consider is to look into the sustainability features of the material and to know if it is truly sustainable from the very moment it was harvested or gained as a raw material up to the time of its eventual disposal.

The material must have very minimal impact to the environment especially in terms of the waste, emission, energy consumption and its capacity to replenish itself in order not to deplete the resources taken from nature due to its production. The energy consumption especially in terms of the harvesting process of the material, its actual processing and the transportation required are all considerable qualities to tag a material that is truly not hazardous to nature.

There are different types of resources which are not recyclable however are still considered sustainable because these primarily have the capacity to highly replenish. Examples of such materials are straw, hay, bamboo, cork, adobe and clay among others. They are tagged with this kind of quality because they can quickly replenish and renew their quantity after they have been harvested. These materials also have low or very minimal rates on emission and are highly deemed for energy conservation.

Hence, if you want to build an eco-friendly and healthier property, you must consider using all natural materials which are sustainable and renewable in nature in every corner and foundation of your home.

Build The Home of Your Dreams With a Construction Loan

With the current economy trend setting low real-estate prices, many assume that buying a used home is worth every dollar they fork out. Others engage in apartment loans, thinking of it as hitting two birds in one stone: having your own home while gaining some extra cash through rental income. While these are all very good strategies, some families opt to get a construction loan and build the home of their dreams.

Although it might sound difficult, building your dream home is possible, provided you understand how a construction loan works. Presently, the construction-to-permanent loan remains the most popular option. This loan encompasses full lot and construction coverage, and even converts to a mortgage the moment your dream house has been established. Once you’ve laid down the down payment, all you have to do is make interest-only payments at a fixed interest rate. And after the construction has finished, the loan will be transformed into either a 15-year or 30-year fixed rate mortgage.

Certain banks will dish out interest reserve accounts that allow you to make interest-free payments throughout the construction process. The bank will calculate the amount of interest-only payments and add the total amount to the overall loan. Funds will be deposited into a different account, which makes this ideal if you currently have pre-existing mortgage or rent payments on your plate. The licensed contractor you’ve hired will then mete out a ‘release schedule’ that details the monthly construction schedule with the necessary funding in tow.

Once you have determined that one of these new home construction loans suits your tastes, then there are five quick steps to set you off on the right track:

1. Know your Affordability Limits

You need to determine how much of the total loan you can afford by using an online loan calculator. Remember that you need at least 20% of down payment to avoid PMI payments.

2. Find Lenders

Compare the current loan rates from online lenders and local banks. Ask a reputable building contractor for past lenders they’ve worked with, and attain their contact information.

3. Attain Pre-Approval

Skim through the pre-approval process of each selected bank. Outline the closing costs and estimated tax rates. Ask for a copy of a pre-approval letter.

4. Find a Contractor

Settle on a reputable contractor that is licensed, insured and has experience in constructing new houses. Figure out a budget plan, building cost and architectural schematics to get your house project underway.

5. Select the Land Piece

Hire a reputable realtor to identify a suitable piece of land in line with your budget. Verify any attainable building permits from your local municipality, and make sure a septic and water system is readily available.

Once you have all these five steps pegged down, you’re all set to building that dream house of yours!