New Home Construction Loan Budget
Building your own home will have many components. The Construction Loan is your tool to allow you to pay for work and materials that is put into the home as it is being built. Typically there are the obvious: hard costs - materials and labor to get the home built. But there are also the soft costs - planning, designing, permits, inspections, and others to bring your home to life.
In addition, closing costs must be budgeted for as well. Origination fees, title insurance, lender fees, recording fees, government fees and others. As with any loan, there is interest. Our construction loan is an interest-only loan during the life of the construction. You will be required to pay the monthly interest on the disbursed (portion of the loan that is used) amount on the loan each month.
All of these items need to be reflected in your budget so you know exactly where the money is allocated and having a contingency should be considered as well. This helps with any upgrades or changes that may happen along the way.
Building a Budget
Now that you have made the decision to build, know the design, where you want to build, and you've selected your lender, it is time to put together a comprehensive budget.
- Identify your priorities - if there are certain 'must-haves' put that on the top of the list
- If you find a 'must-have' is much more costly than you are expecting, maybe something else is not as important to you
- Weigh the benefits of what you are putting into your home and the costs associated with them. Will they add to your life now? Will they add value if you were to sell?
There are levels of pricing:
- Economical - Will get the job done with the least amount of money
- Moderate - Better quality than economical but not considered 'upgraded'
- Custom - Products not typically off the shelf. May be customized according to your wishes.
- Top-Line - Best quality available and priced accordingly
Contractors Capital will work with you through the whole budget process and the construction of all your wishes that start with the budget.
Contact a Contractors Capital Corporation loan officer for more details about residential construction loans, financing and build your own home assistance program.