It’s easier to know what you like when you can see it. It’s also easier to tell someone what you like by showing them a picture or layout. We looked at so very many existing houses on the market. They all had something that didn’t line up with what we liked. At times there was the temptation to settle on it. After all, home is where the heart is and we would learn to enjoy it. Maybe we could change a few things, but it would drive up cost.

We thought of it this way, we come home each day. It’s our place to relax, have fun, maybe have a family. This is probably the single largest thing we will buy and have for 5, 10, 20 plus years. Why not want to pick out everything and get what you want in such an investment? Why would we have a complete stranger build something they want and then sell it to us if it costs about the same to get something built new? Keeping the costs in line is a big part of it when the sky is the limit.

First set a budget and know that you will blow it during this process, go into shock, and then bring it back to a realistic and comfortable level. Then look at houses that are for sale in the areas that you would like to live.

How do you set a budget for a new house? A good starting point is all the calculators online to help figure out how much the bank would be willing to lend. The general rule is to add up the the total amount of money made in a month (before taxes) and divide by 4.

Construction loans vs conventional home loans: The banks handle construction loans differently because they view construction as a little more risky. Why? The explanation we received was the bank is loaning money for a home that doesn’t exist yet. They need to verify the plans, the materials, and the contents to make sure the money is being spent where it should be. Also, it helps to place a total value once it is finished so you know where the investment stands.

I (Eric) started low, she started high with about a 70k difference. You’ll need to find out a balance on comfort levels. Using a mortgage calculator really helps. We don’t officially endorse one, but here are a few we used.  http://www.mortgagecalculator.org/ I (Michelle) really liked this one because it really breaks it down and lists a couple possibilities.

Compare the houses with what you like and don’t like. Would it be better if you like a house and then spend a little less and just upgrade the kitchen? Remember things like the layout and yard are not changeable but cosmetics are. For us there were so many “must have” factors  that we could not find an existing home with enough to satisfy us.

It is important to look at quality factors in a house – this is probably your largest investment and you don’t want it to fall apart or sink you in repairs. We were quite lucky to find Freedom Builders. They talked about quality and took the time to explain what quality means…which is good because I don’t speak in building terms nor did I understand how homes should be built. After all, it is a business and large businesses tend to cut corners to save money. These can turn into costly fixes for the buyer down the road.

It’s hard to think about quality when most people just think about the “nice-ies” (as Jeff puts them), the surface level stuff you are seeing every day. The Freedom guys really helped us understand what a poor construction house looks like and the benefits of a well constructed house. Considering we plan on being in this house 30 (Eric says we will probably end up building another one before then, but I’m sticking with 30) you really want something that is going to last.

Our original expectation was to buy an existing home. That’s what our friends, family, and most people do. We thought building was going to be too expensive or too complicated, until someone pointed out there was a coupon for a free finished basement and stainless steel appliances. Free. Basement…seriously. A single coupon peaked our curiosity and started us down this interesting building journey. An important thing to remember is there are two people making decisions you both will need to live with.

To us, there are three primary benefits to this. 1. We know that that quality materials and building methods will make a solid and efficient building. 2. Create a floor plan that works for us with materials/looks we want. 3. Cost is the same as the budget we set for an existing house.

The challenge is you have to find a place to put it, pick everything out, and wait for it to be built. We’ll talk about these points shortly.