Every project starts with a budget, but with a project like building a custom home on your lot, there are a lot of factors that determine your budget.
We know you have questions, and we have answers! From obtaining land to financing...our expert panel addressed all of these issues and more in our recent Virtual Building 101 webinar. Here are some of the Q&A highlights:
What does the Total Project Cost consist of?
At Adair Homes, we've broken it down into three really manageable parts:
- Price of the land or the payoff on your existing mortgage
- Site development, utilities and permitting; and
- Cost of the house and customizations
When should a customer get started planning their budget?
We have customers who come in and are a year or two out, and that can be the right time because they are planning for their financial future. Others have to get started right away because they are expecting a child or they need a bigger house, so the timeline for them is shorter. Other folks come in and already have a lot, so for them the move is completely based on when they're ready to build. The bottom line? Now is the best time to come in and get started, no matter how long your timeline to completion is. You can get your questions answered and put a plan together for your land and home.
What is sweat equity and how can it save me money?
Sweat equity is for customers who want to have a hand in their home. We also call it owner participation. First, you have to decide how much time you have to dedicate to helping with the project. Our Home Ownership Counselors will help you arrive at that decision of how much you want to be involved. If it doesn't make sense for you to participate quite so much, we offer an Adair Site Services that eliminates about 80% of that participation, but still allows you to learn about your property and be involved, just to a lesser degree.
Do I need to be prequalified for financing?
Alliance Financial Services offers a free, no-obligation budget assessment. It's always a good idea to get prequalified, figure out what you can afford, and determine what you are comfortable spending, according to Brian Minor from Alliance Financial Services. Even if you're not ready to buy right away, it can give you some time to do credit repair and get a head start on that process.
Who is Alliance Financial?
Alliance Financial Services is a sister company to Adair Homes and all they do is construction and traditional loans for Adair, says Minor. Adair Homes has been around for 50 years, and because of that, Alliance is able to offer amazing construction loan products to Adair customers. If you own land, you may be able to use your equity in the property as a down payment. If you don't, you will put an average of 3.5% to 5% down with a 640+ credit score. Now, we offer an improved all-in-one construction loan product that provides you with a 30-year fixed rate mortgage. You won't have to worry about what happens to interest rates over the life of the build because Alliance will lock it in. You are also able to roll down to a lower rate once the home is complete, if rates decrease during building. In fact, working with Alliance Financial can help you break free of the traditional 30-year mortgage with 100% financing.
How does the site visit help determine costs?
The site visit is one of the best benefits to building with Adair. A Construction Manager is going to visit the property with you before you finalize the purchase of the land. They will meet with you on site to discuss where your utilities will be coming from–is it tied to a city service vs. septic? What things are going to affect your bill or your budget? Maybe you're on a sloped lot, but there is a flat area where we can position the house, or be closer to the power line to save you money. When you walk away from the site visit, you will know whether that property is right for you, or if you need to pull that earnest money and start over.
A great place to begin when thinking about budget and how much it will cost to build a custom home with Adair, is our handy new cost calculator tool. If you have more questions about your specific situation or how to plan your budget, contact us, and we'll be happy to help.