11 Sep Can You Afford to Build a Home?
Building your dream home is an exciting prospect, but the big question is: Can you afford to build a home? While the process offers endless possibilities, it’s essential to be clear on the financial side of things. Let’s walk through what you must consider to make your dream a reality.
Check Your Financials
Before anything else, you need to get a clear picture of your finances. What’s your income? How much have you saved? And how’s your credit score looking? These answers work together to answer the bigger question, “Can you afford to build a home?” Lenders usually require at least a 20% down payment on a construction loan, and the stronger your financials, the better your loan terms will be.
Don’t forget to budget for more than just the construction itself. Land, permits, design fees, and unexpected costs are all part of the equation. Be prepared with a contingency fund so you’re not caught off guard along the way.
Build or buy?
One of the first questions you’ll face is whether it’s cheaper to build or buy. Usually, building a home costs more upfront because you cover everything—land, labor, materials, and custom finishes. Depending on your location and design choices, this can range from $200,000 to over $500,000.
Buying an existing home, however, often has a lower cost per square foot. Plus, you avoid many of the construction fees. But buying comes with its own expenses, like renovations or repairs to make the house feel like home.
In short, building is the way to go if you want full control and personalization. Buying may be better if you’re looking for a quicker, often less expensive option.
Think Long-Term
While building might seem like a bigger upfront investment, consider the long-term value. New homes are more energy-efficient, which means savings on utilities. And because everything is new, maintenance costs are much lower compared to an older home that might need constant repairs.
Plus, if you choose quality materials and build in a desirable location, your home’s resale value could be higher, making it a solid long-term investment.
Explore Your Loan Options
If you’re serious about building, it’s time to explore your loan options. Most people finance a new home with a construction loan, which covers the build and then converts into a traditional mortgage once the house is complete. You may also be able to bundle your land purchase into this loan, which simplifies things.
There are also government-backed loans, like FHA construction loans, that offer favorable terms if you qualify. Speak with a financial expert to see what loan options work best for your situation.
Ready to build?
Building your home is a big financial decision, but with the right planning, it’s absolutely doable. Review your finances, weigh the pros and cons of building versus buying, and explore loan options to get a clear picture of what’s possible. Once you’re ready, the dream of building your own home can become a reality—one that’s uniquely yours from the ground up.
At Trevor Scot Contracting, we specialize in making that dream come true. From custom home building to expert concrete work and decking, we’re here to guide you every step of the way. Our team focuses on delivering top-notch craftsmanship and personalized service so your home is built exactly the way you envision it. If you’re ready to build, let’s get started and create the home you’ve always dreamed of—together.
Have more questions?
If you’re ready to start building your dream home or have any questions about our services, we’d love to hear from you. Contact us today to schedule a consultation and take the first step toward making your dream home a reality.