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6 things to consider before building a house

June 5, 2017
Mauro Harto
Mauro Harto

Building a new home can be one of the most exciting and gratifying experiences of your life, but it’s also complex and, at times, overwhelming. If you’re thinking about building your dream home, here are a few things to think about before you start.

Crunch the numbers

The first step is to take a look at the numbers to see if you can afford to build the home you want. Meet with a mortgage loan officer to determine the loan amount for which you might qualify. In your discussions, you should talk about a contingency reserve. Many items like blinds, new furnishings, or perhaps a new washer and dryer will be necessary and typically not included in a new home. Your lender can help determine what you might need.

Once you’ve determined that you can afford to proceed, purchase your house plans and arrange the financing. You’ll likely obtain a construction-to-permanent loan, which provides financing for the building phase, and then converts to a fixed-payment mortgage when construction is complete.

Hire a reputable contractor

How do you find a reputable contractor? Talk to everyone: friends, family, co-workers, and anyone you know who has recently built a home in your area. It goes without saying that you need to hire a licensed and insured professional contractor for your home building project; make sure they are licensed by your state. Many experts also recommend using contractors who are members of the National Association of Home Builders (NAHB). Finally, don’t forget to ask for references on past work. Remember, you hire the builder and he or she works for you, not the lender.

But there’s more to choosing a contractor than simply checking their credentials. You need to find someone that you can communicate with. When the inevitable problems occur, you need to know that you can honestly voice your concerns and that your contractor will listen and help you resolve them. It’s a good idea to interview several contractors and select someone you’re comfortable talking to.

Consider the details before you begin

You found your ideal floor plan, but do you know how you want the rooms to look once the house is built? It pays in the long run to give some preliminary thought to finishes, fixtures, colors, and other details. You don’t want to be agonizing over the tile in your bathroom while your contractor is waiting to get back to work. This will also help you stay within your budget by avoiding potentially expensive, last-minute decisions.

Don’t build too big

You may think the home of your dreams is a 6000-square-foot house with five bedrooms and six bathrooms, but is it really? Besides the cost to build, do you want to pay to heat, cool, and maintain such a large structure? Take a minute to think about your life going forward: what’s right for you now might not be in 8 or 10 years, or even next year. A 2500-square-foot home can seem spacious if it’s well-designed. If your needs change, you can always add to your house.

Think about the resale value now

Speaking of the future, even if you think you’ll live in this new home forever, circumstances may change and you might have to sell it at some point. Most of us don’t know what we’ll be doing 10 or 15 years from now, so it pays to think about resale value now. For example, you don’t want to add so many expensive upgrades that you price yourself out of your neighborhood. Think about how the features you’re installing may appeal to potential home buyers.

Enjoy the adventure, but prepare for hiccups

There’s no doubt that building a new home can be an amazing experience, but remember that it can also be challenging and stressful. If you’re building a home with your spouse or partner, accept the fact that you won’t always agree on everything. Keep your eye on your ultimate goal, and soon you’ll be in a beautiful and unique home that only you could have created.

The Hancock and Whitney team of experienced home lending professionals is ready to help you buy, build, or refinance your dream home. Visit one of our financial centers and talk with a banker today.


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