Getting Started - Building a New Home

Summary: Here are the home building resources you need to get started building your own house. Build your own new home by being your own general contractor.

When planning to build a home you start with credit score information, construction loan information, new home plans, free cost estimating software, free cost estimating spreadsheets, and other home building resources.

After reading my book (The eBook is free), I hope you have grasped the idea that being the General Contractor for building a new home or remodeling a home mainly entails determining building costs (shopping) & hiring professionals (subcontractors) to do the actual work. You certainly do not have to be a “do it yourselfer”. I’m not and I've been building houses a long time.

So what’s next? How do you get started?

1. First you must determine a budget. Cash + Loan = Total Budget
The amount you can borrow (mortgage) is based partly on your credit score.

You could just call any bank or mortgage lender. They will check your credit and determine how much you can borrow based on your income, debts, and your credit score. Don’t do this too often (once is enough for now) as numerous credit report inquires will lower your score.

Note: Checking your own credit does NOT have this effect. You are entitled by the Federal Government to one free credit report per year. However, this free credit report does not give you your credit score.

2. So, go to Equifax and find out what your credit score is. Your credit score determines the interest rate you will pay and your credit worthiness to lenders. The higher your score, the lower your rate and monthly payments will be, as well as your chances of getting a construction loan!

Note: Here’s a FREE Credit Score Estimator from FICO® that can give you an estimate of your current credit score range.

Then, check here and see what interest rate and monthly payments your credit score will determine. (Scroll down a bit to see the interest rate matrix on right)

3. Now determine your loan amount: Affordability Calculator

4. Then subtract land cost from total budget and the balance = the house building budget.
(If you don’t know land cost yet, plan on at least 25% of your total budget for land.)

5. Now determine approximate cost to build a home based on design, quality, & size.

At this stage you can use the free sample floor plans and elevations from home plan companies to go through the process of getting preliminary estimates of building costs and, even getting bids from subcontractors.

Here is a free cost to build calculator you can play around with until you get an idea of the size, quality of construction, and basic design (# of corners and one story versus two stories, etc.) of what you can afford to build.

6. The design and size of a new home are critical elements in how much it will cost to build a new home.

Now, look at new home plans for various floor plans and designs from a few of my favorite home plan web sites!

7. Perhaps you’d like to design your own home:

Punch Software is the #1 best-selling home and landscape design retail software brand in the United States.

Plan3D.com - the world's most realistic home design tool built into a web page. Design one room, create a three story home, remodel a bathroom or kitchen, or redo your yard. Plan3D lets you see ideas with dimensions in blueprint-like mode. Best of all, you see your ideas come to life in realistic 3D.

8. Now, after selecting a home plan and after reading my page on "Cost Estimating Explained", visit a few material suppliers (lumber, windows, doors, flooring, etc.) to get prices.

And, after reviewing steps # 9 and # 10 below, talk to a few of the major subcontractors (carpenters, plumbers, HVAC, etc) to get prices.

Then, using a spreadsheet found on my Free Cost Estimating Spreadsheet page, determine a preliminary cost to build your house.

9. Here are FREE sample contracts and forms: 3 Contracts to Build , Carpentry Labor Contract, Subcontractor Contract, Checklist for Buying Land, Description of Materials for Your Appraiser, Full Waiver of lien, & Partial Waiver of lien.

10. Subcontractors: The Best Place to find the lowest labor prices is on NEW home construction sites.

Here is my chapter to review, on finding, scheduling, overseeing, & paying Subcontractors.

For prescreened subcontractors:

While ServiceMagic can't guarantee the workmanship of a Service Professional, they are there to help your project go smoothly…they'll even provide up to $500 of additional labor toward making the job right.

Angie’s List is where you'll find thousands of unbiased reports and reviews about subcontractors in your area. Their members share their experiences with each other so that you can choose the subcontractor that's right for your job the first time around.

11. Find a construction loan, an owner builder construction loan, but first read "Construction Loans"
Note: Now the best place to look for your loan is at a local small bank or credit union.

12. Whether you are hiring a home builder (general contractor), or building the home yourself (owner builder), the next phase, which is the actual steps of construction, can begin, so read Building the House Step by Step.

Have fun and enjoy.

Remember, you can do it!...Carl Heldmann