New Home Building Suggestions
The sequence of events is as follows: * Pick a location to build. * Get the financing you need. * Buy the land. * Design the house. * Build the house. * Decorate the house. * Landscape around the house. Somewhere between decorating and landscaping a new home building, you probably moved in. Important issues include: how to create a budget; how much will the house cost; will you buy the land separately, or through a builder/developer; deciding on the design of the house; checklists to use during construction; and any warranties to ask for. That's a lot of ground to cover, so let's get started. Picking the location First thing to do when choosing a spot for a new home building - buy a map, and a compass (the kind that holds pencils). For the purpose of this discussion, let's say you want to be within a one hour drive from your job(s). Stick the point of the compass into the map at your workplace(s), put the pencil where you think a one hour drive would be, and complete the circle(s). Let's further assume you want to be within 30 minutes of family and friends. Draw the appropriate circle(s). If you are involved in hobbies or activities which take you away from the house regularly, you probably want to be within a hour's drive from where they are. Draw another circle. Think it through to all the possibilities. When you're done with all the circles you need, see where they overlap. That's the area where you should look to create your new home building. Buying land Your new home site will either be an undeveloped plot, or one of many lots which are part of a new development. The development site will be more expensive initially, but many of the costs you will incur when buying an undeveloped plot are already included. These include: possibly improving a road; a septic system; a water supply; and access to electricity and telephone service. These could be very expensive and there's no way of telling how expensive until you actually start getting prices. Having said that, I think this decision really comes down to your preference. Would you rather be on a street with neighbors nearby, or in a more natural, rustic setting, with neighbors farther away. If you choose the latter, you should always WALK the property before you buy. That's the best was to tell if you will have terrain issues you really don't want. For more tips on buying land, click here. New Home Designs In the United States, new home building designs have changed dramatically over the past 25 years. This is a direct result of people changing their style of living. This has been seen before. Prior to World War II, houses were built with very small kitchens which were strictly work areas. Families always ate in the adjacent dining rooms. In the '50s, they were building homes with larger, eat-in kitchens. Then there was the gradual overtaking of the living room, by the family room, as the gathering place after dinner. Most recently, the great room concept has all-but-eliminated the need for the living room. What we thought of as "classic" designs - like colonial, split-level, cape, and tudor - are no longer the new home building preference. There have been so many built, of course, that you still see them practically everywhere. But new construction is non-conforming and individually tailored. Even large developments offer so many options for a new home building, that you can pretty much design a home uniquely made for you. For some further insight into how to design a home for your specific tastes and needs, click here. In conjunction with your own thought process, check out Home Plans by Aronson & Associates, one of the Internets finest sources for custom home designs. Still another possible option is modular homes. For more in-depth information about modular homes, click here. And here's a page about a Design Build option as an alternative to the typical architect/contractor method. Creating A Budget The purpose of this exercise is that you don't build a new home building that's beyond your means, and spend 10 or 20 years unable to have a life beyond supporting the house. Don't worry. You won't have to give up on the idea. It is always possible to build your dream house at a price you can afford (as long as you're realistic). But be certain that you know how much you can spend. COMPARING CURRENT INCOME TO EXPENSES. Expenses should include any deductions for savings, investments, etc., but don't include your current mortgage payment (with taxes and insurance). Once you move, they will no longer exist. By including savings and investment deductions, you're maintaining your long-term financial plan, as well as a buffer - for that potential rainy day. Deducting expenses from income will determine the size of the monthly house payment you will comfortably be able to afford. Now you can figure out the amount this monthly payment will allow you to borrow for your new home building. FINDING THE RIGHT LOAN. Your financial source (banker or mortgage broker) will be able to plot the monthly payment, the interest rate, your credit rating, and the duration of the mortgage, in order to ascertain how much you can borrow in order to proceed with your new home building. Hopefully, you won't need that much. Notice that this is the opposite of the typical scenario where you tell them how much you want to borrow, and they tell you how much the monthly payment will be. That's how people get into trouble. For one thing, you now have to add the insurance and real estate tax payments onto the loan payment, and you don't yet know what the taxes will be. But in the event that the result doesn't afford you the dream house you desire, there are things you can do. Here are a few tips to help you find the right financial institution. * Get recommendations from family, friends, and neighbors. * Make sure the construction loan portion of the agreement allows for a minimum of 4 draws. * Find a lender that you're comfortable with. Someone who will go out of their way to be helpful. * Find a bank with a long history within the community. They have a stake in the area. * Make sure the lender keeps the loan in house. Some loans get packaged and sent off to firms who might change the rules on you. * The interest should only be applied to the money you draw out of the loan - as it gets withdrawn. 
Lowering Projected Monthly Payments STEP 1 - Lowering the interest rate. You can lower the interest rate of the proposed mortgage AND raise your credit rating, by getting rid of as much of your current debt as possible. There are plenty of companies out there that will help you consolidate debt and pay off loans. In addition, you can Google the Federal Trade Commission to get valuable information on this subject. While you're in the process of lowering debt, (you might think this is obvious, but I'm saying it anyway) conserve spending. By the way, if you want some valuable information about accelerating your mortgage payoff without bi-weekly payments, take a look at this report Click Here! STEP 2 - Review the plan of the new home building. You (and your architect) have designed a home that includes 100 out of the 100 items you had on your wish list. Okay, maybe you sacrificed and only included 95. Time for a little wisdom. STEP 3 - Lowering projected real estate taxes. After you build, a tax assessor visits and establishes your base annual real estate taxes. This is determined by a formula which includes livable square footage as it's main component, number of fireplaces, number or plumbing fixtures, finished basement, and other less-important items. Putting off things like a patio or a finished basement until after the assessor's visit will save you mucho bucks each and every year you live in the house. STEP 4 - Diminish decorating items (for now). Those are examples of big cost items. Look at the little ones - they add up. If your living areas were all going to have crown molding - maybe put it in the kitchen now, and the other rooms later. Wainscoting or other expensive wall covering - you know - later. You wanted coffered ceilings in the great room, give it the ceiling height to accept the coffers, but add the moldings and other fancy stuff later. Will you really ever use that second fireplace? I'm sure you have the idea. Be thorough when reviewing the plans and ask the contractor for suggestions about how to lessen the cost without compromising the quality. If he's good, he'll have a few. One thing you might do to save money when new home building is to buy your new home building materials directly, cutting out the middle-man mark-up. Be careful though. This doesn't work across the whole spectrum of items. The contractor probably can buy many things at wholesale prices, making them cheaper than if you were to buy them. Discuss this issue with him. Meet with your builder to discuss layout options, building product alternatives, and overall pricing. If the budget is too tight, make a list together of the items which will be added AFTER you move in - once you have an opportunity to accumulate some more money. Further, there are several possible features which run the cost of your new home building substantially up. You might consider making them conform to average pricing levels. A few of these items are: vaulted ceilings; steep roof pitches; and large open spans without columns. I don't expect you to change the overall style of your home at this point, but just so you know, a 2-story house will cost less than a 1-story house with the same square footage. This happens because you have less roof and foundation, and because plumbing and HVAC equipment is more compact (the lines don't have to travel as far). Regarding decorating elements, there's no need to get the stuff at the high-end, designer levels. There are many good-looking choices at your neighborhood decorating outlet or home center. It might take you longer to find them, but they're out there. The last way I can think of to keep your payments way down is to keep the house small. For more information about tiny houses, click here. The cost of your new home building On another page regarding "remodeling costs," I said never to use "per square foot" projections because they were inaccurate and misleading. In the case of new home building, it's a more reliable method than when remodeling, but it's still better to get actual prices from bidders. Of course, if you're buying in a development, the builder will tell you what the cost of the house will be. But if you're building on an isolated plot and trying to determine the cost for the purpose of knowing how much financing you'll need, you must get pricing. Get bids from as many reliable builders as you can find in the area. Let them know that after they submit pricing, you will need 30 days or more to nail down the financing. Make sure their price will be good for at least 90 days. When you talk to your loan officer about the loan for the new home building, make sure you have all the cost elements included. You can find a sample of a generalized budget for this purpose by clicking here. Other cost-related issues are also discussed on that page. One place where you shouldn't scrimp is with energy saving components, like windows, and the selection of insulation. The right windows and insulation will keep your monthly utility bills down.
For more in-depth information about insulation, click here.
R.L. Hanson Construction LLC is located in south east Idaho. We have been in business since 1977. We believe in Green Building. The company is Green Builder Certified and also Energy Star Certified. Come visit our web site.
Here are some other things you should read about when you're ready for exterior landscaping:
And a few other topics of interest: For a new home construction checklist, click here. For new home inspections, click here. To learn about warranties you should get, click here. For more about decorating a new home, click here. For more about a Smart House, click here. For more about Prefab Housing, click here. For more in-depth information about what the contractor does when building a new home for you, click here. Personal Finance. articles featuring personal financial planning ideas & personal finance software reviews And, of course, if you have any specific questions about new home building, contact me by clicking here.
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