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How much money to save before building a house?
Posted on 10/22/13 at 12:49 am
Posted on 10/22/13 at 12:49 am
Gonna start building a house in the next year or two. Is there a rule for target amount or percentage before starting construction? Looking at 2 plans right now. One is 3100 sqft, the other 3700. Already paying on the land. Have about $15000 in equity on that. TIA.
1
Posted on 10/22/13 at 2:27 am to Scooby
I had about a 1/3 of the estimated cost of the house when we started.I inherited the land so it was paid for.Doing it yourself or GC?
Posted on 10/22/13 at 7:42 am to pdubya76
I had saved about $27,000 before we built our house.
Posted on 10/22/13 at 8:33 am to pdubya76
Im gonna get a GC. I know my limitations.
Posted on 10/22/13 at 10:51 am to Scooby
I paid the lot down to the point that I owed about $10k. After selling my house, I ended up mortgaging 2/3 what the total project cost. As far as how much I had saved before selling my current house, I'd say I had about $40-45k that I knew was going straight to the build.
Posted on 10/22/13 at 11:24 am to Scooby
quote:
Im gonna get a GC. I know my limitations.
Good idea. We are building now and are contracting it ourselves.We are doing the painting,trim work,insulation,and cleanup work. It has saved us some money but not enough to justify the loss of your free time and sanity.We are getting exactly what we want but if I had it to do over I would get a GC.
Posted on 10/22/13 at 11:37 am to pdubya76
I saved about 50 on a 325 home. I also had the land already paid for.
Posted on 10/22/13 at 11:55 am to pdubya76
I have no problem putting a little work in if needed, but I know absolutely nothing about construction nor do I have construction skills.
Posted on 10/22/13 at 11:56 am to Scooby
quote:
Im gonna get a GC. I know my limitations.
Since you are getting a GC my question is.. Are you financing the construction with a construction loan or is the GC going to finance the construction and then you pay him when the house is finished?
Posted on 10/22/13 at 12:04 pm to ScottieP
quote:
Since you are getting a GC my question is.. Are you financing the construction with a construction loan or is the GC going to finance the construction and then you pay him when the house is finished?
Good question. What's the best way to do it? I was originally thinking about doing a construction to perm loan.
Posted on 10/22/13 at 12:46 pm to Scooby
I sub contracted our build a few years ago and my parents got a GC to build thiers about a year before us, but we did the financing the same way.
We both got construction loans to perm financing.
In both cases the construction loan allowed for 4 draws at different levels of complettion. Then when we were finished we financed 80% of the homes value to avoid PMI. We had equity in the lot and in the fact that we saved money during the build.
So technically I needed nothing in savings before we started.
It worked for us. I am sure they are many other ways to do it though.
We both got construction loans to perm financing.
In both cases the construction loan allowed for 4 draws at different levels of complettion. Then when we were finished we financed 80% of the homes value to avoid PMI. We had equity in the lot and in the fact that we saved money during the build.
So technically I needed nothing in savings before we started.
It worked for us. I am sure they are many other ways to do it though.
Posted on 10/22/13 at 1:18 pm to ScottieP
Yeah I'm hoping between the equity in the land and the appraisal value, we are able to avoid pmi without going into savings.
Posted on 10/22/13 at 1:27 pm to Scooby
We went through Exxon Credit Union. I needed 20% the pre construction estimate, regadless of the lot. In other words. On new construction, Exxon would finance 80% the cost to build. We also did a construction to perm financing.
Posted on 10/22/13 at 1:41 pm to guttata
quote:
the pre construction estimate
Did a GC do this for you or?
Posted on 10/22/13 at 1:55 pm to Ziggy
Yes, but the amount that was allowed, wasn't based on our gc's cost. It was based on the pre construction appraisal which was one of the credit union's appraisers.
Posted on 10/22/13 at 1:57 pm to guttata
quote:
Yes, but the amount that was allowed, wasn't based on our gc's cost. It was based on the pre construction appraisal which was one of the credit union's appraisers.
Gotcha. Thanks for the info.
Posted on 10/22/13 at 2:30 pm to Ziggy
So do they appraise it based on the plans or after construction is complete?
Posted on 10/22/13 at 3:13 pm to Scooby
Both.They do a pre-construction appraisal for construction loan, then when you go to convert to permanent financing they appraise it after construction. I guess to take into account any changes that were made during construction. We ended up going 4% over budget once we made all our changes during construction. Our builder said that we ended up much better than most people.
Posted on 10/22/13 at 4:44 pm to guttata
Did the house appraise for more or the same post-construction?
Posted on 10/22/13 at 8:58 pm to Scooby
Post construction appraisal was about $90k more than pre construction appraisal.
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