Building a home is a significant commitment. It takes an investment of time, money, and emotions to get the job done. However, it’s worth it when you can’t find the house you want or have a vision of your perfect home.
If you’re building a home for the first time, keep these key tips in mind.
Check and Fix Your Credit Score
The first step of building your first home comes well before the shovel hits the dirt. Whether you plan on buying or building, it’s vital to pull and assess your credit report. Your credit score will directly impact how much you are approved to borrow, as well as your interest rates. In other words, the better your credit score, the less you’ll pay over the years.
If you find negative or incorrect items on your score, start a dispute to remove them. Set small goals that can help you improve your credit score in the months ahead.
Get Pre-Approved
Depending on your location, the process for securing a building mortgage might look different than a mortgage on an existing home. Meet with the bank and get a pre-approval so that you know your limitations.
In many cases, a building mortgage is a short-term loan later converted into a conventional mortgage. It may require a higher down payment and a full project plan and timeline. Meeting with the bank to ensure you understand what’s required and what you’ll potentially be approved for is essential.
Keep in mind that there are other options you can take aside from the traditional build. First Home Buyers Direct sells house and land packages in Perth and offers financing alternatives while handling your home’s construction. Take time to research your options and choose the approach that works for you.
Find the Right Design and Lot
Once you have a better idea of your options, you can start to look for a home design plan and building lot. Looking at home designs can be overwhelming. Start by outlining the basic needs as well as wants to narrow down the options. Look for trends that indicate a specific style and sizing preference.
Choosing a lot can be a challenge. Before purchasing a lot, ask for appraisals regarding things like clearing the lot of trees and debris, hooking up power and water, etc. Sometimes affordable lots are unfit for building homes without substantial work; don’t get caught up on low prices without doing your due diligence first.
Create a Realistic Budget
Being realistic is a necessity when budgeting for your home-building project. Even the best-laid plans can go awry when building a home. When you create your budget, leave lots of room for error.
Many first-time builders push their budget to the approval amount without any buffer. This can be disastrous when an issue comes to light and requires an extra investment to correct it.
Get Everything in Writing
It’s essential to work with reputable businesses and contractors while building a home. Even if a contractor has fantastic reviews, it’s still necessary to get everything in writing. If a contractor doesn’t want a written commitment, don’t work with them as this document is meant to cover their interests as well.
Take the time to read the fine print and clarify anything you don’t understand. Don’t hesitate to have a legal professional look over everything before you sign.
Create a Backup Plan
No one wants to think about worst-case scenarios when building a home. However, it’s not uncommon for a project of this magnitude to run long. Take time to make a backup plan in case you have a period without a place to live. For example, decide what you’ll do if your lease expires and you can’t yet move in. Being prepared will help mitigate stress and keep you sane throughout the building process.
With these tips, you can create the home of your dreams in the place you want to live.
