Buying a home is an exciting event, but building a new home to suit your needs is a great opportunity for you as a homeowner. The cost to build a home compared to buying an existing home does not need to price you out of the market, as you can build a home as a first-time homebuyer. Here are some tips to help you buy a new home.
Determine Your Financing
The price of a home you choose to have built is going to depend on several different variables. First, it is based on how much you can qualify for based on your income and credit score, which will be determined by your mortgage broker. Another consideration is in the amount of money you are going to have to put down on the purchase. Any amount that you have as a down payment for your home's purchase will reduce the amount you will need to finance. So, for example, if you are approved for up to $400,000 in a mortgage and you have $50,000, you can afford a home that is up to $450,000. However, if you only have $5,000 as a down payment, you will only be able to buy a home for approximately $405,000.
Another factor that can affect how much home you can buy is the interest rate available for a mortgage. The lower the interest rate, the lower your payment and interest charges will be each month. This will help you reduce your overall monthly budget amount for mortgage costs and can ultimately help you qualify for a larger loan amount. Your mortgage broker or the builder's lender, if you are using theirs, will advise you on your loan pre-approval amount so you can start shopping for a home.
Choose the Right Home Plans
There are many different home builders in your area who you can choose based on the style and type of home you want to build. There are large home builders who provide their own floor plans for you to choose from, or you can select your own home design and ask a builder to construct it. Be sure you consider your family needs now and in the future so your home works well for you.
The type of home you build may need to be a multi-level home that fits on a specific size lot, or it can be a rambler or ranch-style home. If you want to invest in a home that will have an income suite or a mother-in-law apartment, you can add this into your construction plans. Or if you want a large master suite upstairs with the additional bedrooms downstairs, you can add this into your home plans. One of the benefits of working with a builder on your new home plans is that you can tailor the home to exactly what you want.