Building a Home Will Require Some Upfront Money

Home construction financing is a little more complicated than buying an existing home.

Besides getting approved for financing, you will need a slush fund for non-budgeted expenses such as cost overruns, missed deadlines, and construction upgrades.

Understand the numbers before your begin:
see our analysis guide for home construction planning

Define the Type of Construction:

1. Custom Home Construction:
   where the construction is based on a custom design and individually built for the home owner.
   
   This type of construction is a little more expensive and more owner involved. You will need to formulate the design that you would like.
   
   
2. Production Home Construction:
   where the construction is based on 3-4 different "production" designs for a particular neighborhood.
   
   The homeowner may buy one of the plans from the builder and construct the house as specified. Some production plans allow for structural changes at additional cost.

Now for the Fun Part of Home Construction

You need to decide on the style and architectural design of your home. Use our resource information for help:

• Select Home Style:
  Two-story or split-level. English Tudor or Southern Colonial:
  view home styles
  
  
• View House Plans:
  Perhaps there is an existing plan that meets your design? Or ask an architect to tweak or customize a plan.
  search our house plans center
  
  
• Sketch Your Rooms:
  Assemble the rooms you would like and sketch the room adjacencies. see our home design planning guide

Your home construction begins with the lot. Pick the right spot in the right area.

There are 3 ways you can search for a lot:

1. View Home Building Communities
   home builders will often have lots for sale in communities where home building plans are in place. You will be able to situate your home in an established development.
   
   look up home building communities
   
   
2. Classified Ads
   many lots and raw land are posted via classified sections of the local paper
   
   link to search newspapers by state - community
   
   
3. Hire an Agent - Lot Broker
   many real estate agents have access to communities and lots that are available for sale.
   
   find an agent - lot broker

We have resource information about location:
search location and neighborhood issues

Some home owners find and secure their lot prior to bidding their construction project. Often they use the lot as their down payment when seeking home construction financing.

Other home owners will look for a lot after they finalize their design based on contractor bids. They have a better idea what lot will work best for their home design.

Don't forget to appraise the value of your lot.

Complete a neighborhood comparison before you buy:

• What's it worth?

order your personal
home valuation report

sample property reports:

• complete property valuation
• recent sales report
• comparable sales
• subject property report
  
  view sample reports: enter address-zip

Designing the construction specs is the most important task that you will undertake

You need to be as detailed as possible. The construction specs defines how your home will be constructed and designed. You will also spec sheet to bid the project and obtain construction financing.

Basically, the construction specification plan details the number of rooms, type windows and doors, type flooring, type trimming, type heating and cooling, etc.

We can help with our step-by-step construction specification sheet and supporting content for every room in your plan.

1. Step 1:
   start with a general floor plan for ideas on how your home will be designed: view house plans
   
   
2. Step 2:
   develop the spec plan for each component and room in your new home: go to spec planning
   
   
3. Step 3:
   have an architect design an architectural plan based on your spec plan (or have the architect revised an existing plan): find an architect
   
   
   FREE download.
   Use this sheet to note ideas for your home construction plan:
   construction specification planning

The construction specs will be used to bid the construction project

1. Take your spec plan and have it reviewed by an architect or other home designer.
   
   They will revise an existing house plan to fit your construction specs or custom design a house plan based upon your design.
   
   search professional architects
   
   
   
2. Take the architectural plan and submit a bid request from building contractors.
   
   You will need your construction specs to detail your request.
   
   Make sure to work with a network of contractors that have been prescreened.
   
   search building contractors
   
   
   
3. Understand how to negotiate your contract with a contractor —
   
   make sure you protect your interests
   
   contract negotiations

You can arrange financing once you have an acceptable construction bid

Once you receive an acceptable bid from a contractor, you may now finalize your home construction financing needs from a lender. The lender may approve your request for financing based on your specification plan, contractor bid, and qualifying ratios.

There are two parts to construction financing:

1. construction line
2. residential mortgage

We have more information:
link to our financing center for home construction financing

We have information on getting qualified:
see how to qualify for financing

Now for some excitement. Be prepared to manage and control your construction project

• project start
• project management
• change management
• problem resolution management
• cost management
• financial management

Understand what's needed:
see our home construction project planning guide

He who holds the money rules the process

As your construction move through building phases, get each phase of the project inspected before making payment.

Once payment leaves your hand, you lose control of getting things done right.

Information about inspections:
go to construction inspections

Closing your home construction is similar to closing on an existing home sale

As your construction comes to a close, you will need to payoff your construction line with a residential mortgage loan.

Find a residential mortgage loan:
www.PickMyMortgage.com

Notes on Home Closing and Settlement:
see closing and settlement

Complete resource center for moving:
www.SayRelocate.com

One More Task
Monthly expenses are generally tight after completing a home construction project. Take a moment to view our guides on lowering your monthly expenses:

www.SayLowerBills.com

Do you need to sell your existing home before closing on your home construction?

www.SayHomeSell.com

Your decorating budget may be tight, so shop wisely for best ideas and plans

Furniture, electronics, pictures, etc. — and that is just for the interior.

For the exterior, you have flowers, yard furniture, cooking grills, etc.

View ideas:
go to our home building gallery

Now Let's Move In

What's Needed:

• moving checklist
• moving services
• moving storage
• and more

Have You Sold Your Existing Home:

complete home selling guide with home selling services and tips

go to our home moving and selling guides