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Getting started - Preparing to Build your Own Home

With such a massive project like building your own dream home, it’s easy to get stuck before you even begin. Where do I begin? How do I find a contractor? How can I get financing for a house that isn’t built yet? Owner Builder Texas can walk you through all the questions you have to figure out the best and most economical process for your home build. Time is money, so it is best to begin preparing as soon as possible, and keep the construction phases moving along without hold-ups.

Finding your new property (Buying Land)

Choosing the land you want to build on depends on your budget. Don’t waste days looking at land you cannot afford. What good is land if you can’t afford to build on it? As a guideline, the land you buy accounts for about 25% to 35% of the cost of your home, so if your budget is $200,000, your land should cost around $50,000-$65,000.

Paying for your land

Most buyers aren’t in the position to buy their land outright. More realistically, you may need to keep some of your liquid cash flow for the construction phase of building your own home. Land loans typically have higher interest rates than home loans, so if you can save the money from initiating a land loan as well, you can put your money to better use later. If you are ready to build now, one option that works for many people is to ask for an extended escrow of 60-90 days on the property to give you time to prepare for building. If you can get building plans together quickly, you can apply for your construction loan and bundle the cost of the land into the loan from the beginning. This is one of the first ways to save money on origination fees and other costs associated with the loan for your new land that can be avoided if you are ready to build now.

Already own your land or have a loan on the property? No problem. The existing loan will be bundled in with your construction loan to consolidate assets at closing.


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