Photo by Outsite Co on Unsplash
Now that you are a little older, have a job, and are more financially secure, you may start thinking about a home of your own. There are many advantages of this for a single guy. Building equity in a home gives you something to borrow against, and you may be able to earn extra money by renting out a room.
However, the homes available on the market might not suit your purpose. These are typically family homes, designed for couples with kids. You may need to think outside the box and build your own home. That way you can design it with your needs in mind.
It’s simple, but it’s not easy. You may be handy with minor repairs, but building a home is much more complicated. There are also concerns related to financing. If you make a mistake, you may have to live with the consequences for a long time. Here are some things you should know before building your own home.
Consider Going Green
When you’re planning your home, think about things such as solar panel cost and the efficiency of the appliances and equipment you plan to install. When you build your own home from the ground up, you have the opportunity to make it as green as possible. Not only will this save you money on your energy expenses, but if you do decide to sell your home one day, maybe when you get married or start having kids, you can probably ask for a higher purchase price, as green homes are in demand and likely to remain so.
Prepare for Tricky Financing
Lenders have certainly seen and serviced buyers who want to build their own homes before. However, it can be more difficult to obtain a mortgage for a home you want to build rather than one that already exists. That’s because a construction loan represents a greater risk to the lender. This doesn’t necessarily mean that you can’t get the financing, but you should expect to pay more in interest to offset the risk to the lender.
You may also have to make a higher down payment than you would have to with the purchase of an existing home. Borrowers who pay mortgage insurance may be able to make a down payment as low as 3% of the purchase price. For a construction loan, however, you may have to make a down payment of at least 20%, maybe even 25% or higher.
Be Sure To Plan for Storage
One of the advantages of building your own home is that you can plan it according to what you want. Storage space is usually at a premium in a home, but you can plan for as much as you want. Unfortunately, this is something that frequently slips the mind of many people who build their own homes, and they end up with less storage space than they need.
Of course, you can also end up with the opposite problem, which is planning too much storage space and having less living area as a result. You also have to pay attention to the placement of the storage areas. They should be where they are most accessible and will be used most efficiently.
Define Your Must-Haves Before Building
It is easy to let your emotions run away with you while planning your home building project. Emotion definitely has a role to play, but most of your decisions should be based on practical considerations. Take some time early in the planning process to identify the things that your home absolutely must have. Refer to this often during the planning process to be sure that your new home includes everything you need. At several points during the building process, perform mental walk-throughs in which you visualize how your home is shaping up and compare that to what you had in mind in the first place. It should be as close as possible.
Instead of a castle per the old cliché, a home that doesn’t meet your needs can feel more like a dungeon. Careful planning before building can help prevent your home from becoming a trap of your own making.