Whether you’re a first-time home buyer who wants to get the most out of your purchase, or a homeowner looking for the perfect new home for your family, building a house is a great option. Many people assume that building a house is more expensive than buying, but that isn’t actually the case. The cost of building a house is comparable to buying, but you’ll get much more for your money.
Building a house is more affordable than you think! When calculating how much house you can afford to build, ask yourself these five questions:
How much down payment can I provide?
The cost of building a house will largely depend on your down payment. Before you talk to your bank, decide on the amount you can afford. The higher your down payment, the lower your monthly mortgage fees will be.
What’s my monthly budget?
Your bank or lender will pre-qualify you for a home loan based on your income, your credit, your down payment, and other factors for you and your spouse. The amount may be higher than you expect, but remember that what you qualify for might not necessarily be what you can afford!
How much will it cost to buy land?
Land purchase is a unique cost of building a house. Be sure to factor the cost of your property into your overall budget. To learn more about buying land, click here to check out our free land buying guide and checklist!
What upgrades can I afford?
Are you hoping for a house with wall-to-wall hardwood floors or maybe an updated spa-like master bathroom? Your builder will work with you to make adjustments and upgrades to your house plan. Keep in mind that the cost of upgrades can add up quickly. It’s a good idea to sit down and make a “must have” and a “want” list so you can prioritize the most important upgrades.
Will I have other costs?
Permits, taxes, utility connections, homeowner’s association fees, and other costs can bite into your monthly budget. Be sure to research your property before you buy to learn about costs associated with the land. Your builder will be able to tell you what permits and other fees need to be taken care of before you build