Mortgage and Refinancing Information Channel:
We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
Build Your Own Dream House!
So you're thinking about building your own house, are you? Well, you've come to the right place! It's a lot of fun (hard work and eventually fun!) to build your own home and it will save you thousands of dollars. we saved over a Hundred Grand by doing it ourselves - that's pretty significant cash!). If you happen to live in a Large City, like Los Angeles, or anywhere that Real Estate Values are 'close-to-insane', you could potentially save millions of dollars. Interested, you say?? Read on, My Friend, Read on...!
Here's a little list of things you'll need to know:
How to Get Money: You'll need lots of money! Don't stop reading! There are ways of getting financial support in order to build a house . It certainly helps if you have a stack of cash in the bank. I'd say at least $20,000. - $100,000. to have as a back up - there are a surprising number of things that seem to come out of nowhere that require a quick injection of cash. The amount you will need to 'get in the ground' is, of course, dependent on the style and size of your home.
Also, if you already own a home, you'll be familiar with the territory and may have a fair bit of equity, which you can use to leverage other cash. Contact your Bank to get an Appraisal of your current home and see how much you can qualify for a Line of Credit.
We'll look at Mortgages, Builder's Loans, Personal Loans and Line of Credit options. Often, it'll be a big 'ol combination of all of the money you can get your hands on in order to pull this off! Remember, this is not the same as buying a house already built, hiring a builder to build it, or buying a 'previously enjoyed' house. You'll be completely responsible for every aspect of the building process.
To get the money to Build Your House, the Banks send out Appraisers to determine how much of your house has been completed before they will release the Draw Money -- remember the Appraiser Scene in The Sopranos?? Well, that's one of our favorite scenes -- Dwight laughed so hard he nearly fell out of his seat! If you're not a Sopranos fan, the Appraiser gets into 'some trouble' with the Mob, if you know what I mean! ha,ha,ha!
I'm sure there are some good Appraisers out there, who actually know that when the Roof is done, the Subfloor is already in place... d'uh! But even if you have the weeniest appraiser known to mankind, you still have to be really nice and just be prepared with your own cash to continue on with the job. We had to carry the whole project right past the Lock-Up Stage, when the banks usually release the First Draw after the Subfloor is done.
Thank Goodness we had sold our other house first, so that Equity Cash was in the Bank, because that would have been a terrible situation otherwise. So now I would advise having at least $100,000. on hand before you start your own build, just in case. The amount is variant on the size of your house, of course, and we always build big, so do the math and come up with how much you will actually need to get yourself all the way to Lock up, and have that money available before you start.
How Long Will It Take To Build A House? Typically, it can take from 4-5 months if a Big Builder is Building a relatively Small Home, and up to 2 years (I know - that seems crazy, but it can be true, so be prepared if you're building a mansion! ha,ha!) for a very large Custom Home.
In general, if you're Building Your Own House, add a couple of extra months from any estimate for ease in your life, otherwise, your expected time-frame will be too tight and it won't be pretty!
A Larger Home, especially a Custom Home, will usually take between 6 to 12 months. Sometimes you will run into permitting delays, you can't get any Trades (if you live in an area with extreme growth or NO growth...!). Our house took Seven full months for the actual Build, but then you need to add another 6 weeks for the Permits to come through at the beginning. Also, we bought the Land a good 2 years before we actually started to build on it (when you build it yourself, you usually have to pay for the Land in Full before you can start the Dig...). I took a fair chunk of time to design the right house for this Lot, then had it professionally drawn.
We were in no hurry, because we wanted to be sure our other house was Sold before we 'Broke Ground', so we would never have to worry about carrying two mortgages (yikes!). Our House Sale went through in February and we broke ground on March 4th. Good timing, no?? We went ahead and got the Permits ready when the other house was Conditionally Sold.
Keep in mind that if you're hiring a Builder (Buying a Home through a Big Builder), and it's one of their 'stock houses' (meaning that the've built many, many houses in the same identical style...), that the Building Time will be much shorter than if you built on your own. Once you've built a house, it's much easier to build the same thing (or even a slight variation of that same home) again, because now you know the 'trouble spots', and changes that could be made to simplify the project.
When we are ready to Build again, I think we'll sell this house first, buy a smaller place that's 'an easy re-sale' in Town, buy a new Lot, then start another Build. It's important to look at every side before you even begin to get started, so you don't create chaos in your life. The further ahead you can plan, the better off you'll be.
In case you're wondering, 'an easy re-sale' is a house that is gorgeous but not too big and not too expensive. Big and Expensive happens to be my favorite kind of house, but not for a quick sale... and it needs to be in a really good location, preferably close to Schools and Shopping so it will appeal to young families. Also, I always choose a house with 3 Bedrooms on the same floor (Main Floor of a Bungalow or 2nd Storey of a 2 Storey home), because that's the easiest house to sell to a young mother. And by 'young', I mean any mother with kids at home that she still needs to wake up in the morning! ha,ha!
And, if you're really intuitive, this is already a plan I want to put into action, so I just have to convince Dwight that it's time to put this house on the market, since it can easily take a year to sell a really big house...sometimes they just fly off the market, but I want to be prepared! Let me know if you're interested in our gorgeous home! We'll miss it terribly, but I can always build another, right??
Hire a Builder: If the thought of having a few hundred Grand just sitting in a bank somewhere makes you feel faint, you should definitely consider Hiring a Builder. Quite often they will carry you through to the end of the Build with $20,000. down. Some really big builders will let you get in with much less - sometimes as little as $500. down. Good to really check around to see what you can get that's in your price range.
Always keep in mind that the more Custom your house is, the more you will have to pay up-front and again at the end. Makes sense, but sometimes that's forgotten.
Hire a Project Manager: I don't know how you would Build a house on your own if you were both working in a Nine-to-Five job -- I'm thinking it would be next to impossible. I don't know how many times Dwight had to leave what he was working on to come out to the house to deal with one problem or another. And if he wasn't available, or it was one of my areas, I would come out. Since Dwight is a General Contractor (as well as a Heating & Air Conditioning Specialist), he was able to correct any problems to prevent delays rather than having to bring in all sorts of other people.
Hiring a Project Manager for your Build is less expensive in the long run (as opposed to a regular Builder), but you will have to have your money in order first, as you would if you were building all by yourself. You can always start out on your own, and bring in someone when and if you need them, too. Find a General Contractor before you get started who would agree to those terms so you don't find yourself stuck at a crucial stage (and, yes, they're all crucial stages!).
How to Find Land This is key, since it can often be difficult to find land in the city that does not belong exclusively to a Developer or Builder, which means that if you buy their land, you have to hire their Builders to build your house. What you want to look out for is a B.Y.O.B. Lot (this does not mean 'Bring Your Own Booze' to the work site!). This means Bring Your Own Builder. That's you! It also means that you could contract the building out to an Independent Builder, who might build for significantly less than a big name builder.
Check the Internet, your local real estate papers, bargain papers (there's usually one in every city -- the one in Calgary is the Bargain Finder ), newspapers, etc., to see if you can find a B.Y.O.B. (Bring Your Own Builder) Lot or a good Builder. It's always a good idea to check out local Builders, first, in case they can build what you want for basically the same a what it would cost you to build on your own. If the difference is less than $50,000, it's probably better to buy through a Builder, whether Independent or a 'Big Name' company. You may be able to do part of the work, provided your skill level is adequate, which will knock the price back even further. Everything is food for thought when you're looking at an investment in your time and money of this magnitude. You're less likely to 'get in too deep' cash-wise, too.
You can always hire someone else this time around, then really watch to see how it works and try it yourself on the next house! You'll make a pile of money, either way, especially if you buy in an area with some positive growth potential! Remember, Real Estate rarely goes down in value, so it's a good investment. You'll have a nice place to live and when you sell it down the road, you'll make a bigger profit than most people make in the Stock Market. Plus, if the tax laws permit it, you won't have to pay taxes on the money you make from the spread (how much you paid for your house and how much it sells for). There's generally a time frame involved in this, so check with your accountant to get the low down for your area.
How to Design Your Home: The land you buy will determine what you can build, for the most part. If you're in the city, the neighborhood will be pre-planned, and the Developer you bought the lot from will let you know what's allowed. Many new neighborhoods are 'Front-car Garage' houses. Some will allow for a detached garage, or a garage attached at the back. Make sure you're comfortable with the restrictions that come with the lot before you buy it. If your lot is smaller (as most in-town lots are!), you'll probably have a basic shape that you can start with (say, a long rectangle, or a square box) - check out show homes for ideas (of course, you can not copy someone else's house, but you can gather ideas for features you like to see what you want to incorporate into your own house.
Once you've got the basic shape in mind, sit down with some graph paper and start playing around with what you want in the house. Three bedrooms on the main floor, four bathrooms (because you really love prunes!), large island in kitchen - you get the idea. The other thing that I highly recommend is the Internet (surprise, surprise!). There's a ton of information out there, and there is an incredible selection of house plans on the Net. They're way cheaper than having an Architect draw your own designs, and they will often accommodate them to suit your needs (small fee involved, but worth it if you really, really need a sauna off the Master!). The general cost of having your own House Plans drawn up is anywhere from $2,500.00 and up, depending on the house and the Architect. Perhaps you'd even like to build a Walk-Out Bungalow like ours!
Extra Costs of the Land: This applies primarily to buying an acreage, since you'll need to add about $25,000 into your budget to get the services in, but it's good to make sure that there are no hidden costs or amenities that you're required to pay for your lot. We really scored and found an acreage in an Estate Area that already has the services to the lot line -- WooHoo! That's a huge savings! (I'll put that money towards the development of the Garden Room!)
Every so often you may come across a Beautiful Piece of Land and the Developer will carry the price of the Land with a small Down-payment until you're finished the entire Build and your Mortgage Money has actually come through, then you pay the Developer for the Land at the end. This is very, very rare. More often than not, you may be able to hold the Lot with a Down-payment until you are ready to Build, but you will have to Pay for the Land in its' entirety before you can go and even get the Permits to Build. I know, I know ... it's a Big Money Game, but it can be done if you're really determined. All money-related info is much better to know in advance than to discover it later and lose your shirt... you want to make money on a build, not lose it, right?!
After Thought: Well, we're done the house, now, and Money was the most difficult part of the job. When you are building on your own, you actually seem to need a 3:1 ratio of Cash to Home. What that basically means is that if you want to borrow $100,000., your new home should be worth $300,000.
We were amazed at how little the Appraiser actually knew about the Building Process. We were also shocked at the tiny increments of cash that we got from the Bank. It was not done the way that you're generally told it will happen -- in three main sections -- Subfloor, Lock-Up and Completion.
We were given 10% here, and 5% there... it was a long and arduous process, and one we will try our best to avoid in any future Build. We'll set up a large Line of Credit based on the Equity of our House and go as far as we can before we attempt to get another Builder's Loan.
This is not to say that Builder's Loans are never good -- not by a long shot. They can be the difference between being able to Build the House or Not, so definitely pursue that avenue if you need to... you might get lucky and find a really great Appraiser who does know the building process.... they must be out there!
The other very difficult part of the Build was with the First Finishing Carpenter. We found him through a reliable source and followed through the regular way. Everything looked like it was going to go smoothly until he started fighting with me about how the Kitchen Island was to be built. He did his best to pit Dwight and I against one another -- I would give him the Drawing of how the Island was to be built and he would go to Dwight to say it had to be changed. (Little women don't know 'nothin' about buildin'... ugh! What a yuck!)
Every time I drove up to the new house and saw his truck I would feel physically ill -- not a good sign!
I can't tell you how many fights this caused... Finally, I said to Dwight that we needed to band together against this guy and stop letting him waste time (hours and hours at $45.00/hour...) by pitting us against one another. Dwight agreed and we went back in with a united stand. Much better.
Even after that, this guy couldn't stay on track with the work that had to be done before we could move in, so after I found another carpenter (no matter how annoying or slow someone can be, always wait 'til you have a replacement before you make any serious changes...I think that might go for some marriages, too! ha, ha!), I came into the house, nothing had been done, and I fired him. He stayed to finish out the day, and Dwight said he had never seen this carpenter work so hard! Now, that's funny!
It's incredible, really, how something in a relatively short time period of your life can cause so much upset -- this part was very difficult to get through, but we got through it and now it makes for a good story!
Our new Carpenter, Trevor Campbell, came in and saved the day... he fixed all of the other guy's many mistakes and finished everything that needed to be done before we could move into the house. AND, he never fights with us! It's a miracle! Trevor is a breeze to work with, so we can get the work done quickly and easily -- perfect! We would recommend Trevor to anyone planning any type of Carpentry Work for their home.
As an aside, this is generally good advice for any building project -- or anything else that is a huge thing in your lives -- stick together as a unit to get the job done. Any item can be compromised on -- there is never any one item that should cause so much grief that the whole job comes to a halt. Better to resolve to like it (or not look at it!) than to waste time and money (and potentially your relationship...) fighting over any aspect of the job.
This is not to say that you shouldn't try to persuade your partner in the right direction if you know they are headed down the wrong path, but do it gently like you're steering a car around a tight bend -- go slowly and carefully so you don't run the whole thing off into the ditch!
The most important thing is to Keep the Job Going and Get the Job Done. Then Hire a Mover and Move on in -- and hopefully, Up!
MORE RESOURCES updated Wed. May / 12 / 2021
Today's mortgage refinance rates: 15-year rates notch 88 days at record low | May 11, 2021 - Fox Business
7 Steps for a Successful Mortgage Refinance Business Insider
May begins with a dip in mortgage refinance rates: fall to lowest since February | May 3, 2021 - Fox Business
May begins with a dip in mortgage refinance rates: fall to lowest since February | May 3, 2021 Fox Business
How to refinance a mortgage | Mortgage Chase News & Stories
Today’s mortgage refinance rates are rising, but they’re still under 3% — for now | April 13, 2021 - Fox Business
Today’s mortgage refinance rates are rising, but they’re still under 3% — for now | April 13, 2021 Fox Business
Mortgage Refinancing Initiative to Help Lower-Income Borrowers The Wall Street Journal
Today's mortgage refinance rates — one key rate rises while others stick below 3% | April 12, 2021 - Fox Business
Today's mortgage refinance rates — one key rate rises while others stick below 3% | April 12, 2021 Fox Business
Today's Mortgage and Refinance Rates: April 24, 2021 | Rates Slip Business Insider
Today’s refinance rates advances – April 23, 2021 Bankrate.com
Today's Mortgage and Refinance Rates: April 18, 2021 | Rates Swing Business Insider
Today's mortgage rates inch up from record lows, but refinance rates still a great deal | April 15, 2021 - Fox Business
Today's mortgage rates inch up from record lows, but refinance rates still a great deal | April 15, 2021 Fox Business
The Average Homeowner Could Reap $4,000 a Year by Refinancing. Here's the Smartest Thing You Can Do With the Savings - Money
The Average Homeowner Could Reap $4,000 a Year by Refinancing. Here's the Smartest Thing You Can Do With the Savings Money
Should You Refinance With the Same Lender? How To Decide Realtor.com News
PHH Mortgage Lender Review 2021: Offers Standard Mortgages But Lacks Basic Information - NextAdvisor
What is a commercial real estate loan? Bankrate.com
Borne the Battle #240: Benefits Breakdown: Interest Rate Reduction Refinance Loan (IRRRL) - VAntage Point - VAntage Point Blog
Borne the Battle #240: Benefits Breakdown: Interest Rate Reduction Refinance Loan (IRRRL) - VAntage Point VAntage Point Blog
3 Problems With Cash-Out Refinancing Motley Fool
The Federal Reserve Meeting Suggests Mortgage Rates Will Stay Low - Business Insider - Business Insider
The Federal Reserve Meeting Suggests Mortgage Rates Will Stay Low - Business Insider Business Insider
Digital Homeownership Platform Better to Become a Publicly-Listed Company via Merger with Aurora Acquisition Corp.; Company is Redefining the Homeownership Experience - Business Wire
Digital Homeownership Platform Better to Become a Publicly-Listed Company via Merger with Aurora Acquisition Corp.; Company is Redefining the Homeownership Experience Business Wire
Can I get a home equity loan or HELOC on a second home? It's possible to The Mortgage Reports
Mortgage Refinance Options & Types | Refinance Chase News & Stories
Best mortgage refinance lenders in 2021 Bankrate.com
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low - CNBC
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low CNBC
Mortgage refinance demand plunges 43% from a year ago, as higher interest rates take their toll on borrowers - CNBC
Mortgage refinance demand plunges 43% from a year ago, as higher interest rates take their toll on borrowers CNBC
The ins and outs of mortgage refinancing The Stawell Times-News
Current 30-Year Refinance Rates for May 2021 NextAdvisor
15-Year Mortgage Refinance Rates for May 2021 NextAdvisor
Today's mortgage refinance rates keep rising — one key rate hits 3% again | March 30, 2021 - Fox Business
Today's mortgage refinance rates keep rising — one key rate hits 3% again | March 30, 2021 Fox Business
Today's mortgage refinance rates stop rising, one key rate slips downward | March 23, 2021 - Fox Business
Today's mortgage refinance rates stop rising, one key rate slips downward | March 23, 2021 Fox Business
Today’s mortgage refinance rates hold steady for third consecutive day | December 11, 2020 - Fox Business
Today’s mortgage refinance rates hold steady for third consecutive day | December 11, 2020 Fox Business
Today's mortgage refinance rates push further into record low territory | January 28, 2021 - Fox Business
Today's mortgage refinance rates push further into record low territory | January 28, 2021 Fox Business
Jumbo Mortgage Refinance Rates for May 2021 NextAdvisor
How to Refinance Your Mortgage Motley Fool
Current FHA Refinance Rates for May 2021 NextAdvisor
Everything You Should Know About The New Mortgage Refinancing Fee That Goes Into Effect Dec. 1 - Forbes
Everything You Should Know About The New Mortgage Refinancing Fee That Goes Into Effect Dec. 1 Forbes
Home Price Gains Reached 15-Year High in March The Motley Fool
Today's mortgage refinance rates stop rising, hover near historical lows | March 16, 2021 - Fox Business
Today's mortgage refinance rates stop rising, hover near historical lows | March 16, 2021 Fox Business
Today’s mortgage refinance rates mixed — one key rate drops while another rises | March 2, 2021 - Fox Business
Today’s mortgage refinance rates mixed — one key rate drops while another rises | March 2, 2021 Fox Business
Best VA Mortgage Refinance Rates for May 2021 NextAdvisor
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 - Fox Business
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 Fox Business