Building home or buying home
Building home or buying home?
For many individuals wanting to be homeowners, this can be an ongoing thought process. Do I buy a home or build one from scratch?
Building home or buying home? There are many pros and cons to both decisions. Ultimately you may realize it comes down to what you’re looking for both in and outside of your home. Owning a home can come with many new responsibilities and financing. Therefore, the first step in your decision making is figuring out what exactly you can afford.
Going to the bank
Not many people are lucky enough to have a disposable amount of cash in their accounts to cover the cost of a home. However, you may just have enough saved to consider making a down payment on a mortgage plan. The amount you will be allowed to borrow depends on how big of a down payment you have. Most experts recommend you have at least 20% of what you would like to borrow. Secondly, your monthly income and what you can afford on monthly bases.
It always encouraged to have a second person to help you in this next step of your life. Their income can also be taking into consideration and can help you get a bigger loan.
Neighborhood search
Where exactly do you want to live? Before you even go a realtor do some research on your own. Are you planning to expand your family? If so you may want to look into neighborhoods with great schools, families already established and of course a low crime rate.
Maybe you’re a little more specific. If you live near a coast or on an island, you may want a piece of the coast? Just understanding what you’re looking for will help you narrow down the neighborhoods you’ll beginning you hunt in.
Finding a home
This is where you beginning to weigh your options. Buying a home can be a simple task or a very difficult one depending on what you are looking for. Getting a realtor to help you in this is always advised. There are a lot of things to consider when buying a previously owned home and they would be the ones to answer all your questions.
Pros
The two biggest pros to buying an existing home are cost and convenience. If you’re lucky you can find, tour, place a bid, be accepted and in your home in less than two months. Older homes are usually found in more mature neighborhoods and are typically not part of a homeowner’s association. If you do happen to find your dream home in a neighborhood that has a homeowner’s association be aware. This association can determine a lot of changes if any are made to your home. You may also find yourself having to pay monthly fees on top of your mortgage payment.
You may also find more value in an existing home as you may be able to negotiate the price down. Especially if there are a few things that need to be fixed or changed this can help you remediate those problems before moving in.
Cons
The biggest con of purchasing an existing home is that it may not be the exact dream you had in mind. You have to undergo a renovation, big or small before the home fits your liking and depending on what needs changing this can become an expensive venture. The cost of the renovations will most likely not be deducted from your purchase price and you may end up having to take out, even more, loans to help as your home more livable.
It’s always recommended, especially when buying an older home to update the windows and major appliances such as HVAC and roof first. Most older homes are not energy efficient and as such though you may not pay a monthly HOA you may end up paying higher utility costs. These little changes can help you save money and over time you can take time renovating your home.
Building a home
Building your dream home has never been easier. With contractors and designers there to help guide and make your dream a reality you’ll find it coming along more smoothly than you think.
Pros
Everything is picked by you. Placed where you want it and designed with you in mind. There is no section in your home that was done without your consent and approval. This makes it feel more customized and personal to you.
You’ll definitely feel a sense of fulfillment when everything is finished as if you were the one doing the building. Everything in your home will be brand-new and under warranty so you shouldn’t experience any problems for a few years. Also, all building codes and modern technology will be up to date in your home.
Additionally, if you are building your home in a newer upcoming neighborhood you may find their neighborhoods offer a few benefits. Things such as recreational activities and community lawn maintenance could be an option. You may even be able to be closer to the newer parts of town making you walking distance from all the buzz saving you money on gas.
Cons
Anyone who has had their home built can tell you. A professional contractor with a history of great reviews and known for sticking to timelines are important otherwise you run the risks of your project taking way too long. Additionally, a designer that understands your budget and can work within it without sacrificing design and efficiency is also important as it adds to your overall bottom line.
The last thing you want is for your home to be in the building stages for over a year and you having to spend even more money than anticipated. Or worse having to move in mid-build because your lease may be up and you have nowhere else to live but you can’t even function in an unfinished home.
To be safe try to plan for an additional 2-3 months before you actually want to move in. You never know the hiccups that may happen and you never want to move in mid-construction or have nowhere to live. Try to plan your deadline 3 months before your lease is up to give yourself the room for extended builds.
Conclusion
Deciding whether to build or buy is not an easy one. Always do your research of think of what it is you may need for you and your family before making the final decision, however. Speak to your banker and realtor to see what option makes the most sense and is best for you and your timeline. At Caan Homes we are here to help.