Our 3 key first steps in building a house will help you upskill quickly so you are ready for designing, building and/or buying a home for the first time is (a bit of a frightening – but exciting – operation.)
Hopefully, our 3 top pointers will kit give you insight into achieving your dream home. We love ideas from our network, so drop us a comment or give us a vote!
Take note below here below now, these are the core first 3 key steps in building a house. they are simple and yet often forgotten or ignored. (So simple yet so painful if ignored!)
The 3 Key First Steps
- Organize the finance budget and mortgage first
- Design and select within that budget
- Don’t cut corners in design or construction.
Key Step 1 in Building Your House
Before you choose your design, check your budget and start to organize the money. Count the cost!
…ensure you get an OFFER LETTER from the lending institution in your hand with the real final amount you can borrow.islandhomeplans.com
You can always request your own preliminary approved loan amount from a mortgage adviser, bank or credit union when contemplating owning or building a home. Remember, it is based on your salary or income and lending institutions calculate a percentage of that to estimate your loan amount for your future home. It’s normally in the region of 40-45% maximum of your income.
It is important to point out that this is PRELIMINARY. It’s a guide. SO don’t PIN ALL YOUR HOPES on whatever the lending institution staff tell you. Shop around. Get other estimates.
When you are ready to choose your best deal, then ensure you get an OFFER LETTER from the lending institution in your hand with the real final amount you can borrow. There is a process to getting this, but nothing said before that letter is approved or real.
You can use mortgage calculators online and website market comparisons so you have an idea of market options. Click this one below to estimate your loan.
The banks normally only start the paperwork for organizing the actual cash…(which can take 2 – 5 months )… once they know you have a land deed and town planning permission available. (Many banks will also combine land purchase and house build costs together for loans.)
When they are complete, you will receive the formal written, letter headed offer letter, stating the amount they will pay out and the terms, such as the interest rate.
Remember too that ehe bank owns YOUR home until you have paid the whole loan off even though it is in your name.
All of this to say, count your costs but also consider a property which is well-designed and built and increases in value …for the bank and for your future equity.
Another Part of Key Step 1 – Don’t Forget to Factor In Other Costs!
We often forget the additional costs of property and new mortgages. It can often feel like strangulation when added to all the costs of building, moving, fitout and more!
After building completion, you have less money to live on for a period because of the additional extra expenses of moving, fitting out with furniture and curtains etc, new insurances…all of which add up. So we do strongly suggest that you add a separate ancillary expense budget for odds and ends in your calculations for building a house .
Examples of Ancillary Costs
Here is a list of some of the most common ancillary costs, some of which (numbers 5, 6, 7) can be combined into your loan. Just remember many banks may charge interest on the extra costs!
- property tax
- council or state tax for utilities (eg garbage collection)
- life and other insurances
- maintenance costs
- bridging finance rates
- mortgage application fees (can these be waived?)
- financier survey charges
Make sure you ask questions and budget them in!
But before we get there, ..how do we even know how much our new dream house design will cost to build? This is one of the most important steps in building a house.
Remember the saying “count the cost before you build the house?”
You don’t want a half finished dream home!
Design or select a home within your budget.
Step 2 in Building Your House
I need to shout about that one! Do I need to repeat?
Don’t waste money on dream plans that you can’t afford to build.
So often we have seen the casualties from “champagne taste with mauby pocket” customers who fork out on a design which they then can’t afford to build. (Mauby (pronounced maw-be) is a drink made from tree bark…the opposite to expensive champagne).
You, however are now in the know and will not be doing that!
This step in building a house is about being prudent. You may watch Grand Designs but they never mention the debt people live with! Better to live within your budget and design to expand the home in approximately 5 years once you have recovered from the new expenses.
And still go on holiday every year!
If you are on a tight budget, designs need to provide you with BASICS at the beginning (unless you have money to burn!)
Remember you have a lifetime to add-on cool stuff – it changes in fashion over the years anyway!
(Of course this does not apply if you have enough money to build and buy a luxury home! But even there, you need to budget!).
Step 3 in Building Your House
Don’t cut corners in design or construction.
Whether you are building a new smallhome or your home purchase is already built (eg house, apartment, duplex) and you want to renovate or upgrade it, get qualified experienced input so that the works being done repay you in the future with increased value of your property. In our third key and final step in building your new house, it’s better to spend a little bit more.
Don’t be blindsided by super low costs from builders or construction companies. You may end up spending double!
Even the removal of one wrong wall or a poor design of circulation flow makes it more difficult to resell your home at profit and can reduce the value of the property!
(We are here to help. Checkout our design tips here from our qualified architects. Don’t be one of those whose property gets stuck on the market !)
Here is a bonus tip: You think you won’t move…and the home is for forever? Well, life throws wobblers at all of us and your house asset can provide cash if needed ! So design it for resale…even if you don’t intend to resell!
Again, make sure you have checked that builder out!
Choosing Your Builder
When hiring a builder or buying materials, you may not be able to afford the best or most expensive but there are simple good products and good builders in every community!
Choosing a builder is sometimes a bit scary and you need someone trustworthy and honest. So we’ve listed some pointers for you.
- Get a cost breakdown..full breakdown..not a one liner.
- Ask for references from past clients and suppliers and call the references up to check!
- Check one of their building sites. People should be working!
- Have a quantity surveyor recheck the quote with the plan. (Usually banks make this part of your mortgage costs.) Tell the surveyor your specifications..don’t ask the builder to price granite and not tell the surveyor.
- For multiple quotes, Write it all down and give each person quoting the same information so you get a true comparison! (We can provide that service if you need it!)
To Sum up:
The whole house buying and building thing can be a bit daunting at first but our 3 point plan of budget, appropriate design, and good referenced professionals will steer you right.
Our top 3 steps in building a home are taken from over 30 years in the home design and build developments industry where we have worked – in the USA, Caribbean, Ireland and the UK.
More information on steps in building a house can found on the web; this piece for Forbes from Houzz will add to our advice.
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