Saying that building a home starts with finding the right location and ends with moving in is quite simplistic. The truth is that in between finding the location and finishing the home, a lot of underlying processes take up much time, money, and energy. Educating yourself on the things that you need to know – planning the budget, choosing the location, and picking a builder with great track record will make the whole process easier.

These days, interest rates are at an all-time low. Now is a great time to build your home if you have the means for it. There are many types of lenders that you can work with, but finding one that has knowledge specifically in construction lending will be better. It is a must that you find a construction lender that understands the ins and outs of financing programs so that they can find one best suited for your needs as you construct your home. This is an important phase in planning to build your house because the loan amount that you will qualify for will determine much about the kind of home that you will be able to build. It is also good if you can find a lender that has an online method of checking your loan status and other particulars. This is for your convenience, so that you can check on the details of your loan at any time.

As a homeowner, you can cut on your costs by opting for a loan that covers the construction phase and converts to a permanent loan once the construction is finished. A one-time close CTP (Construction-to-Permanent) Loan can do this for you.

Before CTPs became a popular option, homeowners had to take out two loans; one for the construction phase and a permanent loan after the home is built. With CTP loans, you won’t have to reapply and pay for two different kinds of closing fees. It streamlines the solution for your financing needs into one neat package. After your loan converts from a construction to a permanent loan, you won’t have to pay any other fees anymore. CTPs also typically have interest protection so you’ll have a fixed interest rate even if the rates begin to rise.

CTPs are reimbursement loans which mean that funds are disbursed as the construction of your home enters different key events. This gives the builders more flexibility in terms of pursuing building projects around your home.

Planning For Your Loan

When taking out a loan, it is important to also take into consideration your lifestyle as well as your family’s lifestyle. Some people fall into the trap of borrowing too much or too little and ending up having to pay for some parts of the house out of their pocket. It’s also good to keep unpleasant surprises at bay by asking your lender how much the closing cost would be. Typically, you will need to ask about the title costs, loan fees, appraisal fees, inspection cost, and the likes.

Working with a lender that has a website where you can check disbursement schedules and schedule of fees would also be helpful.

Understanding How It Works

When you apply for a CTP loan, it means that you are asking the lender to determine the value of your new home, which has not yet been built. In order to do this, you will need to give the lender details about such things as the building plan, the type of materials you will use and their descriptions, and also the total cost of building the house.

The lender would also sometimes ask for you to submit a copy of your builder’s license together with a statement that the builder is capable of carrying out the construction of your home until it is complete. Of course, you and your builder are exposed to certain risks during the building stage of your home. Lenders will usually require additional insurance coverage such as:

• Course of construction casualty insurance – An insurance policy that covers “all risks” including fire, vandalism, replacement cost, builders’ risk, and others. The owner would be the policy holder, and the insurable amount is equal to either the replacement cost or the total loan amount, whichever is lower. Once the construction loan gets converted to a permanent loan, the insurance policy also gets converted to an “all risk” homeowners’ insurance coverage.
• Workers’ Compensation Policy – This should be taken out by the builder to cover for work-related accidents that subcontractors may encounter while building your house.
• Flood Insurance – This is a requirement if your house will be built on a government-declared flood zone.
• General Liability Insurance – This can be provided by you or your contractor. If your contractor provides this, the coverage should be a minimum of $1,000,000 or certain types of policies that have a broad coverage of liability endorsement. If you opt to pay for this insurance, the requirement is a minimum of $300,000 per occurrence which covers both property damage and personal injury.

Building a home means a lot to most people. The journey is filled with many challenges from start to end. Even if you haven’t started building your home yet, knowing about these things will be beneficial so that you can start preparing as early as now.

When in the closing stages of building your home, there are a few things you should remember. These are the things that new homeowners typically forget but are also the things that are very important in making sure that things will run smoothly after you’ve moved in.

1. Make sure you know all the details about the warranty your builder provides – You should know what company carries the warranty that your builder provides. It’s a good idea to walk around the interior of the house and inspect everything from fireplace to air conditioning system, to the water heating system. You should do the same thing to your exteriors; inspect the paint, shingles, garage doors, etc. A good builder will usually have a checklist of things that have warranty and need to be checked. Get a copy of the checklist and keep it in file for your maintenance checks. Remember that as the owner of the house, you have the responsibility to check the parts of your home that is under warranty before the first year has ended.
2. Keep yourself on top of the situation when it comes to your builders and his suppliers – Some homeowners prefer to shop for their own appliances, while some opt to have the builders buy the appliances for them so that they’re ready when they move in. Make sure that the appliances are ready when the builders say they would be. If they’re not ready, make sure they have an alternative solution until the appliances are ready. Check with the builders once in a while to make sure that they make good with the promises that they’ve made.
3. Make sure that the utilities are already transferred to your name by the time you move in – Builders will usually have utilities under their company name until you move in. Avoid disruptions in your service by making sure that the utilities are transferred to your name before or by the time you move in.
4. Check whether or not your furniture will fit into your new home’s door – There’s nothing more frustrating than to realize on the day that you are supposed to move in that your beloved antique living room set won’t fit through your home’s doors. Check your furniture to make sure that they fit so that the builders could make the necessary adjustments on the doorway.
5. Mark existing nicks and marks on the walls – If there are nicks and marks on the walls prior to moving; just mark them with something that won’t damage the surface to make sure that the damage was done before you moved in. Marking with painter’s tape is a good idea so that you won’t damage the surface further.
6. Check everything before you move in to make sure the builders don’t void the warranty – Do a quick rundown on the day before you move just to make sure that all warranties are intact and have not been voided by the builder. Before you change anything in the house because you didn’t like the way the builder did it, you should also check whether or not what you will do will void the warranty. Before you change anything, check if it can be done by the builders instead of you.
7. Make sure you know if you need to finish something before closing – Check whether or not you need to finish an addition to the house or anything else before closing. Some contracts require you to finish everything you need to do (like an additional deck or a gazebo) before you can close.
8. File all your warranties in one place – Moving in may become a flurry of paperwork and things that need to be in order. Don’t lose your warranties in the process. Just keep all warranties in one file and in a safe place. Also, you may want to record all the factors that may contribute to the deterioration of the parts that have warranty. Take down notes about extreme weather changes like storms, or other eventualities like earthquakes.
9. Have your landscaping done before you move in – It’s best to have your landscaper (if you’ve hired one) do the landscaping a few days before you move in so that you’ll feel like you’re moving in to a complete house already.
10. Take future add-ons into consideration – Some people think that choosing the cheaper option is good, but there are times when it’s better to spend what you can now to have the features you want built in on your house. It may be more costly to upgrade or add those features on in the future. For example, it may be more costly to have a fireplace added on to your bedroom later than if you just had the builders add it now.

The kitchen is undoubtedly a focal point for a lot of homes today. This is the place where families are most likely to gather and make memories over dinner conversations. Builders need to get up to date with consumer preferences when it comes to kitchen structure and design.

Biggest Selling Point

How a kitchen looks can be a major selling point or a deal breaker for people looking for a home to buy. One of the things that your buyers would probably look at is how your kitchen cabinets are structured. Trends show that most people these days prefer bigger kitchens even if they don’t often cook at home. Studies of these trends also show that buyers prefer functional cabinet systems instead of just pretty-looking ones. As far as appearances are concerned, more people prefer an informal design in their kitchen rather than formal designs. More people are also concerned about the appearance and functionality over the price and flashiness of kitchen systems.

As far as new homeowners are concerned, most prefer to have their kitchens opening to an adjacent room so as to feel that it’s a vital and accessible part of the house. In terms of decorating the kitchen, more people are opting for a cross cultural experience as the popularity of Asian and Hispanic influences in designs are becoming more popular. Rustic colors, distinct geometric designs, a streamlined look, and dark wood are all the rage in designing kitchens these days.

Since kitchen cabinets are usually purchased along with the home, it’s important that builders have an understanding of what systems go along with the design of the kitchen itself. Current designs for kitchen cabinet systems offer an interesting line of choice of cabinets in varied shapes, sizes, and functionalities. New homeowners these days are more conscious not just of the attractiveness of the design but also with the durability of the systems and their functionality. A lot of the newer designs incorporate dark with light wood finish or an antique style finish accomplished through glazing.

Supplying attractive and efficient cabinet systems are not just limited to bathrooms and kitchens anymore. The demand for a better cabinet system is becoming more popular especially in dual-purpose living spaces.

The Growing Need for Organization

As home owners live in a house longer, they naturally accumulate more gadgets, books, and other belongings. The need for ways to integrate organizers into living spaces is continually growing. Examples of such organizers may include more spice racks, roll-out cabinets and trays, pull-down racks, shelves, and more. Added designs and details are also popular for kitchen systems these days, but avoid over decorating or putting too much embellishments on cabinet systems. Consumers these days prefer a casual atmosphere with maximum functionality included.

Many families these days share the warmth of their homes with pets which they treat as a part of their family. According to popular surveys, more than half of American homes have pets. These homes provide shelter for a total of about 77.6 million cats and 65 million dogs. Of course, for home owners, owning pets comes with unique challenges.

Protecting Your Home from Pets

When planning to build a home with pets in the scenario, it’s best to choose your building materials wisely. Opting for hardwood, stone tiles, or laminated finish floors would be better than choosing wall-to-wall carpet for obvious reasons. You can go for area rugs if you want to put some texture on the floors of your home. Wall-to-wall carpets are hard and expensive to clean up and they absorb odors which might make your house smell funny after a while. Bare floors will save you the headache of cleaning up the “accidents” your pet may make once in a while. You may opt to put carpeting on the stairs so that your pets would avoid slipping, especially if your stairs are made of smooth wood or marble.

Weigh down your area rugs with furniture so that your pets won’t scatter them around or think that they’re chew toys. To protect your walls from stains, hair and paw prints, you can also opt for matte finish or the non-glossy finish. You can also use window blinds, roman blinds, and the likes as an alternative to heavy drapes which can accumulate dust and pet hairs over time.

If your pets don’t have a habit of climbing furniture, then you can color-coordinate their beds or pillows on the floor to match your furniture’s upholstery. If your pets like to climb on to your sofa to nap, you might want to cover your furniture with washable cloths.

Making Room For Your Pet

Making room for pets in your new home takes some planning. There are ways to make the spaces attractive so that they go along with the architectural theme of the house. In the kitchen, you can create dens or crawling spaces under the cabinets to keep your pets from getting stepped on while you’re cooking. Laundry rooms can be a great place to make a grooming station for your pet. Feeding stations can be built in as pull-out compartments from kitchen cabinets. For people with cats as pets, you can create a more dynamic play area for your cat by making built in ramps and beams in addition to kitty condos.

There are special carpets that are manufactured specifically for pet owners. These carpets have waterproof backing that is meant to keep your pet’s urine from reaching the carpet.

Outdoors, you can also create a separate space for your cats or dogs so that they will do their digging there instead of dig away at your flower beds. It’s also important to know that making space for your pets in your home means that you’ll need to pet proof it as well. Your garden, for instance, should have no plants that are poisonous when eaten. You can consult your landscaping company for recommendations on the types of plants that you can get for your garden. Also take extra care to close and lock cabinet doors that contain toxic materials because your pet may be able to open them. You can also think about investing in invisible fences to keep your pets from getting run over by passing vehicles.

With a little careful planning, your new home can be a haven for your pet too.

Choosing a location for the construction of your new home is a very important step. Your decision to build your home on a specific location will affect your future home life, the kind of changes you can make to your home someday, and its future resale value should you want to sell it. Here are a few things to ask yourself when choosing the location of your new home:

• Would your building plan go along well with the houses in your neighborhood? Take a look at the neighborhood where you want to build your home. Would the value of your home be consistent with the general value of the homes around it? Are there agreements that you need to follow in terms of what color you can paint your house with, or how high your house can be?
• Are there good schools in the district where you plan to build your house? Aside from being good for your own children if you have any, this would also raise the resale value of your house.
• Are there convenience stores, hospitals, restaurants, and other commercial establishments near the location? It is good if these establishments are within a few minutes drive from the location you are eyeing to make sure that buying things and eating out would be more convenient. Should there be an emergency, it is also good to know that there is a nearby hospital you can drive to. It may not be advisable to be choose a place near business establishments either, because this may affect the noise that you will have to put up with at home.
• How is the crime rate in the neighborhood? You would definitely want to live in a good neighborhood where crime rates are kept at a low level. How efficient is the area’s police and firefighting system? Building in a bad neighborhood lowers the resale value of your property.
• What direction should your house be facing in the area you picked? The direction of your house will make energy consumption more efficient in the long run. Before you start building, you need to take into consideration what part of the house faces north because this will contribute a lot to the climate inside your home.
• What kind of taxes are you looking at? Check whether the taxes you’ll need to pay in the area you choose will be something reasonable for you.
• What kind of terrain are you going to build on? Check whether the location you are eyeing is on a flood zone or not. The higher the terrain, the better it is for some people because of the view you get, and better drainage. Checking the kind of foliage inside and in surrounding areas of the property is also a good idea because this will add to the natural beauty of your new home’s environment.

Checking the location of the lot you want to build on is not just checking the address to make sure you’re building on a prime location. There are more things to consider, and these are the things that will make or break your new home. Take the time to sit down and check the suggestions above to make sure that the location of your home is good for you and your family.

Most people who are in the market for a new house these days build homes for the purpose of having a permanent place to settle down with their families. With the fast-paced lives that people live these days, it’s no surprise that most people are looking to settle down in a place where they can have roots and start a family. Families go through stages too, and a little foresight while planning the construction of a house can help living spaces become flexible enough to accommodate these stages.

Flexible & Interactive Floor Plans

Open floor plans are designed to have living spaces connect to a central space as a hub of interaction. Study rooms, dining rooms and kitchens can open up to a family room so that children and parents can still interact while in other rooms. For example, parents can still interact with children in the family room while preparing dinner. Families tend to struggle with fitting in quality family time as they grow older and everybody becomes busier.

Homeowners can consult with designers to create a flexible space in any part of the house to accommodate the family’s other needs as well. For example, an eating nook can double up as a sun room for the family to have coffee together or have a place to play board games or do homework together. It can be expanded to accommodate some bookshelves, a window seat that can also function as a storage area, and a few additional seats or reading chairs.

Playrooms for children can convert to a den or home office once the children get older. Just install heavier French doors to offer some sound proofing.

The kitchen can be a great focal point for family interactions. A long center island can be a great place to have family dinners or it can serve as a buffet table when entertaining guests. You can also use islands as a bar or a room divider in your kitchen.

If you already have an informal dining area in your kitchen, your formal dining area can serve as a computer or a project room for children when they are still young. As the children grow older, you can convert the room back to a formal dining area to accommodate friends when they come over.

The Bedrooms

Parents might want their room closer to their children’s room when they are still young. However, as children grow older, they seem to require more privacy and more space from their parents. You can anticipate this need and prepare for it by building an extra bedroom with a bathroom at other parts of the house. While the children are still young, they can sleep in bedrooms close to you, and then transfer to a room further from the master bedroom when they are older. Meanwhile, the rooms that aren’t being used yet can double up as a study or game room.

Building rooms over the garage can also be a practical idea because this is usually cheaper to add in during the construction and can come in handy as a game room or a guest room. Basement rooms can also be a good idea as children can decide to move there when they grow older and parents can use the rooms they vacate for other projects. It is better to install a plumbing system in extra living spaces while the house is being constructed because it will be more expensive to add it on at a later time.

It may be better to install separate bathrooms for children so as to keep the peace and avoid fights over bathroom use. Also, to add insulation for the noise, you can put a few buffer areas between bedrooms like a closet space, a small study, and the likes.

A nice option to pick for children’s bedroom is a shared suite. Two bedrooms can be connected by a wide closet space. Each bedroom is accessible through a connecting door in the closet. Siblings can share one room while they’re growing up while the other room acts as a study or a media room. When they grow older and they want their own space, they can move to the adjacent room. The connected rooms can still foster communication and interaction between siblings.

While it may be ideal for small children to have smaller rooms, older children would prefer to have more space for themselves. Design your rooms’ structure so that in the future, as your children grow older, you can move things around with ease.

Storage Areas

It’s highly advisable to put more custom shelves in closets. For children, it’s good to have shelves that they can reach so they can put their toys away in accessible areas. As they grow older, these shelves can serve as places to put their shoes, school books, and other stuff. As years go by, shelves can serve different purposes. What once was a place to put dolls and toys can someday contain trophies and picture frames.

When thinking about storage areas, take into consideration if the additions you make will be permanent or temporary. If you opt for permanent fixtures, think about how your child will appreciate living with the fixtures when they are older.

You may also want to consider putting additional spaces in your garage. It may double up as an extra parking space, a storage space, or a workshop when the kids are have left the house.

Mudrooms and Laundry Areas

Ideally, mudrooms and laundry areas should be in separate rooms. Mudrooms can have lockers, hooks, and storage areas where you and your children can store shoes, boots, and umbrellas. It can also be a storage area for seasonal accessories like beach toys, camping gear, skis, and the likes. You can also design it to be a drop off point where you and your children can put their keys as they go in and out of the house. If you have a spacious laundry room, you can also use this as a hobby room or a sewing room.

Making room for the changes that your family can go through is possible with some foresight and creativity.

It is important to understand the importance of permits. While this may seem common sense to many, it is not uncommon for an owner builder to experience significant delays for lack a plan approval form their county. Delays cost the owner builder valuable time and money. Research your local permitting process early. Lenders will not release hard costs until proof of permits have been received. Do the right thing and get your plans approved before closing on your construction loan. Never begin building without permits.

What is Plan Check?

Plan check is the process of having engineered blueprints approved by the local building authority. Plan Check is performed to make sure your new home meets all building codes in the county. Most counties can turn around Plan Check request within a few weeks while some counties with high growth and stringent planning and zoning requirements can take longer.

Once your plans have been reviewed you will received a county approval stamp or official correspondence stating the approval. At this point you are issued a building permit number and you may pay for your permits or wait for loan funding.

What is a Site Plan?

A site plan is simply a footprint review of your home. A footprint is how your home sits within your property boundaries. Some counties have set back rules which state how your home can be placed on your lot in reference to right-of-ways and streets. Not all counties require Site Plans.

Fees

Permit fees will vary from county to county. In some areas of the country permit costs can be expensive running into the tens of thousands of dollars. Impact fees and school taxes are typically included into your permit and due prior to building. Permitting fees should not be overlooked as they can make up a substantial portion of your total construction budget. Find out your costs early.

What happens if I start building before permits?

Countless of unfortunate souls have found out the hard way that permits are a must. It is very common for building authorities to have structures torn down and started over for lack of permits. Their justification is that there have been no inspections to the property so there is no way to determine if the home has been built to code throughout the process. Building authorities have teams of lawyers and don’t have a problem with making the renegade owner builder an example to the entire community.

Most states do not require that you use any particular contract form. You can buy a form at an office supply store or online office supply Web site. You can even get a standard contract form, within your state, from your local real estate agent and broker. It is recommended, however, that you seek advice from a real estate attorney to assist you with understanding the terms and conditions of a contract.

How to determine if a real estate contract is valid

A real estate contract is valid when it becomes “legally enforceable”. In layman’s terms, once all parties sign the contract, they are legally required to perform according to the terms of the contract. A party can be in default of the contract once they fail to perform. In short, they could be legally required to pay damages to the other parties within the contract.

A contract between parties must act in accordance to the law. So, parties cannot execute a contract to commit an illegal act. In this case, the contract involves fraud; therefore, the contract would automatically become invalid. The following are a few important elements that you will find in a written contract:

• Legally Competent Parties – All parties of a contract have to be legally competent in order to enter into an agreement, for example, being mentally competent and of legal age.
• Consent – All parties of a contract must enter agreement knowingly and willingly to the contracts terms and conditions.
• Consideration – This is anything of legal value exchanged and offered in a contract including valuable goods such as services, money, etc. This has to be clearly explained within the contract.
• Agreement by Offer and Acceptance – An offer to purchase a house by a buyer and the approval of this offer by the seller.
• Contingent: a party who has an existing home may desire to buy before actually selling and make the contract “contingent” on selling their home. So, sellers who agree to a contingent offer often give the buyer a certain amount of time to perform. In the case that the buyer fails to perform, the seller is allowed to cancel the contract.

Understanding all that is included within a contract can be a little mind-boggling. The key is that you understand the terms and conditions of a contract that you are signing. There are other issues that you should take into consideration when it comes time to signing the dotted line.

You will want to make sure that a private well inspection is performed. If a house is not linked to city water, and connected to a private well, you should make sure that the water meets suitable health standards.

Make sure that you also obtain a preliminary title report. These records will reveal monetary liens of record and it will even show if the seller is able to transfer a clean title to the buyer.

Lastly, but certainly not least, be aware that a real estate contract does not include any financing contingency. So, if you need to obtain a home loan in order to purchase a house, make sure that you consult your attorney or real estate agent. You should ask him/her to add a condition that will make your offer contingent upon your ability to acquire the loan.

Also, if your loan falls through (it happens) at the last minute, you want to guarantee that you will not lose your money. This is why it is so important to have your attorney review your contract before signing it.

Want to know what the return on your remodeled kitchen or new room addition will be?  Money magazine has assembled the 25 most common home improvements and the value they add with the “renovation wizard” calculator.

Remodel Return Calculator

Attic Bedroom Remodel 
Basement Remodel 
Bathroom Addition 
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Deck Addition 
Family Room Addition 
Home Office Remodel 
Major Kitchen Remodel 
Master Suite Addition 
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Roofing Replacement 
Siding Replacement (vinyl) 
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Two-Story Addition 
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UPSCALE Window Replacement (wood) 
UPSCALE Window Replacement (vinyl)

Getting Started

Before working on your construction costs you should have the following items completed:

• Pre-qualification for a construction loan
  Not because Home Construction Capital gives you access to the nation’s best construction loans, but because without this you don’t know what you can afford.  All your work could be for naught if you can’t afford the home you are planning.
• Plans Selected
  For a detailed analysis you will need to have a general idea of the home you will build. There are endless amounts of plan sites on the net to choose from.  Most plans come with a detailed description of the items needed such as type and quantity of lumber, etc.

Discover Building’s Free Construction Cost Breakdown

Home Construction Cost Breakdown Spreadsheet

Cost To Build Web Sources

Estimated Repair and Remodeling Costs – Average Cost Per Job

Construction Costs by line item- In 2004 the National Association of Home Builders compiled a national average costs to build for a 2,800 sqft home.  The data is three years old, but provides a good rule of thumb for what to expect in terms of percentages by line item.

Quick Construction Cost Calculations

For those not ready for the in-depth analysis.

Free Cost To Build – 5 minute construction cost analysis based on 34 categories.

House Plans Cost To Build – Pick a plan and order a cost to build, costs generated by zip code. $29

Detailed Cost To Build Data

Marshall and Swift provides most data for appraisers completing the “Cost Approach” on construction appraisals.  They provide feature rich, high end, products for professional cost estimating. Very educational site.

Home Repair and Remodel 2007 Cost Guide – $76.00

Residential Cost Estimator Xpress – Software program $379