If you are in the market for a new home, you certainly have some specifics in mind about what you want from it, whether that is a big backyard so the kids and pets can have plenty of space, or maybe a kitchen large enough for entertaining. You may go through many ads and walk-throughs before settling on that perfect home. However, your journey doesn’t have to be limited to only looking at existing homes.
The prospect of building a new home sounds daunting to some, as they feel there are many more factors to consider as well as a higher cost. For example, the National Association of Home Builders noted that the average purchasing price of a new home in February 2015 was $275,500, while the average price to purchase an existing home in that time was $204,200, according to Go Banking Rates. Yet, there are various aspects to consider when trying to decide between buying and building. Make sure you are considering all angles when coming to a decision about whether to build or buy.
Get what you want
There is no doubt that building a home means you can customize it as you feel. While you will certainly have to pay for it, you can budget your new home from the ground up and incorporate ways to make it your own. It is common that homeowners may want modifications after purchasing an existing home. These don’t have to be costly, yet you have to figure if an existing home with some additional work will cost more money and time than simply building one that you want.
“Upfront costs of building a home can be great, but recouping your investment can be easier.”
In addition to having control over the design and amenities of the home, you will also have a clean slate. Being the first to live in a brand new home can be liberating in both having everything new and having created this home from the ground up.
You must be aware that new homes aren’t commonly built in high-traffic city centers. If you are one who likes to walk to work and be downtown, then you might not be one for building a new home. Additionally, new homes tend to be built on patches of land that are largely undeveloped, which means there might not be much in the way of large trees or even lawn, as noted by HGTV.
More often than not new homes are built as part of developing subdivisions. If this is not your idea of living, especially with the knowledge that your home will not be the only one being built and you’ll have to hear construction going on even after yours is finished, then maybe you should reconsider building a home. Or at least consider building in an area that is less common.
Costs can vary
Upfront costs of building a home are great. However, recouping your investment may be easier. For example, when your home is brand new, there is less upkeep that goes into it, which means maintenance costs will be lower. Additionally, if all of your appliances will be new, insurance companies might be willing to look upon your home with more favor.
Likewise, new windows, doors and insulation are going to keep your home better sealed during the cold or warm months, which means you won’t have to run your heat or AC as much, saving a bit of money that way as well. And down the road, when you are looking to sell your home, you may be at an advantage with your modern appliances and energy-efficient windows, which is always something to keep in mind with any house – how will the next homeowner feel?
Mortgages work a bit differently
One more item that is important to note is that mortgages don’t work the same for building new homes as they do for purchasing existing homes. It is pretty simple to understand why – a lender is not willing to provide a loan for something that doesn’t exist yet. However, if you are considering building a home, your best bet is to simply speak with your lender about what options are available, if any.
Building a home, similar to purchasing home, comes with many aspects to consider. Whatever you decide to do, speaking with your lender before either process begins is the way to go. Whether building or purchasing, make the decision that makes the most sense for your situation.