Build Your Own House

New Home Building Budget

Summary: A new home budget equals your cash plus the amount you can borrow on a mortgage loan.

Hi Carl, I really don’t know much about buying or building a home. I wanted to know about how much would it cost to build a 3 bedroom house with a 1 car garage about 3000 square feet & 1 or 2 bathrooms.

I know there is a lot of work and money involved but I don’t even know where to start.

I wanted to know how much total for the land and the house. And how would I go about starting this process?

Thank you for your time, Ashlee

Hi Ashlee,

You are not alone. Most people haven’t a clue as to where to start the home building process.

That’s why I wrote my books and have a web site.

I know that sounds like a cop-out to your question, but I have put many hours into a “walking in your shoes” type of approach to “Where do I start to build a house?”

After all, many, many, many years ago, with the first house I built, I started the same way as you and everybody else, clueless.

As you will see on my Getting Started page on, you first must determine a home building budget.

Cash + Loan = New Home Budget.

Any mortgage loan officer, bank, credit union, or on line mortgage calculator can help you determine how large a mortgage loan you can afford. Try this mortgage affordability calculator from

Total budget minus estimated land cost = new home budget. You want to try and keep the cost of land below 33 percent of your home building budget.

A Realtor can help you find land that fits your budget.

And, there are thousands of new home plans available on line that can help you decide on style or design.

Also, you might want to consider buying a finished new house, or one under construction on a lot in an area you desire and in a price range based on your Total Budget.

Hope I have helped, Carl Heldmann