How Much Do You Need to Save Before Building a Home?
Getting something new is quite rewarding, especially if you had it designed for you. And if you are considering homeownership at some point, having a new house built is often a tempting prospect. Still, having a home built can be expensive, and it will usually take longer than if you purchased an already existing one. Understanding the pros and cons of getting a custom a home will help you make the right decision.
How to Afford Your New Home
It is often less expensive to buy a home rather than getting one made, but that will depend a lot on the cost of living in your area. However, it’s essential to choose an option that works for your budget. It’s best to avoid having a monthly payment that is higher than 25 percent of your household’s total income.
When considering how much the monthly payment is, consider the property taxes, mortgage, insurance, and any other costs. Remember, the more you save toward the down payment, the less you’ll owe on the mortgage each month, and you’ll find more options are open to you.
Even if a home is still a distant goal for you, now is the time to begin saving up. Look for ways to save on your monthly bills. Do you still have debt from school? If so, refinancing them with a private lender might be the way to go. A student loan refinance calculator will help you understand what you can expect to pay. That way, you’ll be able to create a financial plan to help you reach your goals.
The Advantages of Building a Home
There are several reasons to consider building rather than purchasing. One of the biggest ones is the ability to customize everything. You’ll get to pick the cabinets, layout, lighting, and other options. Even if you are looking to have one built in a subdivision, you’ll still have some options.
Today’s homes meet the most updated building codes and also have great technology. That means you likely do not need to worry about maintenance costs and repairs later down the road. Everything from the HVAC system to the roof will be brand new.
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The Drawbacks of Building
Of course, you already know that one disadvantage is that you’ll often pay more for having a home built. The price is also more difficult to negotiate – if you were getting one already made, you could likely shave a few thousand dollars off the cost. When dealing with a builder, you often do not get that much room to negotiate with the price. Even if you can, you likely won’t get to save as much off the price.
There are also some hidden costs to deal with. Whether it’s appliances, countertops, or other aspects, it’s best to ensure everything is laid out before signing anything. If you decide to upgrade to something beyond the basic package offered, you’ll also find yourself spending more.
That’s why you’ll want to add a bit of wiggle room to your budget as well. Plus, if you decide to have blinds, landscaping, or other extras done after moving in, you are also on the hook for those.
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How Much Do You Need to Save Before Building a Home?
