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my husband and i are seriously considering having a house built and unfortunately, we don't know as much we'd like to about the process. we can't afford to pay for the house we live in now, and for the new house as it's being built. what are our options? and for those that have built, any pieces of advice or words of wisdom?? thanks so much!!
I suppose these days it will sound stupid to say "wait until you can afford it" ?
On a more helpful basis.....when we have had construction loans, the monthly payment was based on what we'd already drawn....not the full final amount.
Does that help any?
Oooops....forgot one important thing.....you have to plan on the fact that you have a house to sell and it might not.
If you can't afford both for awhile (and renting it out won't cut it) you'd be better off to get one sold then rent while building or you could find yourself in one tough spot.
thanks for responding old_cold, i appreciate it. fortunately we are renting a house right now, so we won't have the hassle of trying to sell before our house is finished.
I can't help you with more specifics because they may not be at all relevent to your situation.
We did not, for instance, go through a developer.
Owning the land and putting in utilities was our 'down payment', for instance.
We designed and built several homes in N.Ca over the years. Some we financed ourselves, but most we obtained construction loans. Having some contingency money is wise before you start. Most construction loans have a lower "loan to value" than a regular house loan, which means you should have some amount of money to put down. Do you own the land? It would also be wise to hire a very reputable contractor (not the cheapest bidder) and or architect to help you with the process. make sure the contractor is licensed and BONDED. The contract to build your home can be riddled with traps and surprises, so have the contract reviewed by an attorney or your architect. This process is risky for those who do not have construction experience and I do advise hiring qualified people to help you along the way. Best of luck
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