Tips For Building A New Home

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Tips For Buidling A New Home - How to Make Sure the Process Runs on Time and on Budget

tips for building a new home.Getting a Construction Loan
The typical construction loan is a temporary financing that supplies the borrowers and their contractor with the money to construct a new house. The construction loan in some cases will only cover the actual building of the house, and not the procurement of the lot on which it will be put up. Construction loans are riskier for the lender. The general practice is for the temporary construction loan to be refinanced with a “permanent” mortgage loan, upon completion.

A new construction to permanent loan program combines the construction and permanent financing of your project. You qualify for the loan once, lock in the permanent rate, sign one set of loan documents and have up to 12 months to complete the construction. For the duration of the construction period, interest is charged only on the funds that have been paid out. The permanent loan period starts when the project is finished.

Criteria for Choosing a Builder

The most critical factor in successfully building a new home is the builder you work with. To protect yourself:
1. Define practical essentials such as electrical outlets, air conditioning, and number of bathrooms before the project is started.
2. Negotiate a fair price.
3. Get a warranty – reputable builders offer good warranties and stand by them.
4. Get everything in writing.
5. Read your contract carefully.
6. Protect against delays – only close escrow on your new home when the work is completed.

If you pick a lemon of a developer, not only are you likely to suffer during the building and closing of your new house, but you’re likely to have long-term problems after. You have several choices. You can choose a large local developer, with successful developments around the area. Or, you can find a small builder, who often has everything riding on a single development.

Avoid Home Design Fads
With the $233 billion remodeling business flourishing – up more than 50% from 1993 to 2003 – producers and sellers are pushing more alternatives for floors, countertops, bathroom fixtures and other stuff that costs tens of thousands of dollars to install and rip back out again. So if you’re considering installing open cabinets, floating staircases and bowl-shaped bathroom sinks, ask yourself which of these trends is likely to die before the end of the year.

Finding the Lot that Works for You
Which is of most concern when you’re thinking of buying a lot – wildfires, wind, hurricanes, flooding, tornadoes, earthquakes, winter ice or summer sun? In addition to every one of these, location – length of commute to work, suitability of schools, neighborhood, distance to shopping, and taxes, should all be taken into account. And if you buy your lot in a subdivision, CC&Rs (Covenants, Conditions & Restrictions) can be crucial.

The Construction Process
To get a handle on the construction process and what to expect, spend an hour or so perusing the home building section of your local bookstore or library. However, familiarity with the general home building process is not enough. You need to have your architect carefully explain how to read a set of drawings early on. Or you can take a plan reading course at your local community college.

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