How to Create a Comprehensive Home Building Budget

Successfully reaching your goals when building a new home begins with developing a preliminary budget. Whether you are experienced in real estate or a first-time home buyer, a budget that considers expected costs, allowing for incidentals, and outlining your spending limits in detail will keep you on track financially and lend peace of mind throughout the building process. From a detailed cost breakdown to financing options and keeping things within your designated budget parameters, our tips for creating (and sticking to) a comprehensive home-building budget will ensure a smooth process and set you up for homeownership success.

 

Assessing Your Financial Situation

When it comes to how to budget for a house build, start with a foundation for your budget by examining the factors that determine your financial situation. You’ll need to consider your annual income, credit score, current monthly obligations, general outgo, and any additional sources of income like inheritance or outside financial support like gifted funds from family. Consider every component of your finances to determine a realistic and accurate building budget that aligns with your existing finances.

 

Setting a Realistic Budget

In creating your budget, it’s essential to be realistic—particularly for those building a house on a budget. To set a realistic budget, take the available funds you determined in assessing your bills and obligations and be sure to allow for some wiggle room. With the monthly finances taken into account and an idea of what amount you’ll need to finance, you’ll have a realistic picture of what you can afford with your home-building endeavor.

 

Detailed Cost Breakdown

Any home-building budget should include a detailed list of known and potential costs and opportunities to invest further in every room, from the foundation to the rafters. Here are some examples of what might make your cost breakdown list:

• Land purchase/lot fee

  Choosing where your ideal home exists is one of the most critical initial costs you’ll want to consider. If possible, allow for as much room in this area of your budget plan as possible, so a lot that’s extra spacious or offers a sprawling view isn’t something you have to compromise. After all, the one thing that’s nearly impossible to change is your home’s location.

• Design elements and optional upgrades

  Whether it’s top-of-the-line appliances or elegant molding details throughout, chances are a few details will be a priority for your family home. Do your best to anticipate any design details and options you’ll want to include in your budget. New Home Co.’s Insignia Design Program allows you to transform your home with design elements that reflect your tastes and your family’s needs and make your new house feel like home.

• Post-construction landscaping and necessary furnishings

  Once your new home closes and you take the keys, the need for budgeting is not behind you. This is where your allotment for post-purchase expenses comes into play. If planned thoughtfully, that blank canvas backyard or empty rooms with empty walls will be an exciting continuation of your home-buying process rather than a stressful afterthought.

 

Planning for Contingencies

As they say, the best-laid plans often go awry–particularly for those endeavoring to build a house on a budget, which is why it’s wise to be prepared. Fortunately, New Home Co. has been delivering award-winning homes in some of the most desirable communities for over a decade. Our expertise in new home construction means fewer contingencies in creating your ideal home. Minor hiccups during construction still require some flexibility in your budget. For example, the flooring you initially selected within your budget may suddenly become discontinued, and the next suitable option might be outside your original flooring budget. Allocating additional funds for incidents like these will help get things back on track swiftly while keeping things on budget.

 

Financing Options

If you’re financing your new home, this is to be noticed in your new home construction budget, and how you go about financing can significantly impact what you can afford. New Home Co.’s network of preferred lenders make financing your dream simple, often with the ability to secure lower rates, reduce monthly mortgage costs and more helpful options. Utilizing the expertise of a good lender can help you purchase the most house for your money.

 

Monitoring and Adjusting Your Budget

Once you’ve created your new construction home budget, continue to check in regularly and ensure things are on track so you can make any necessary adjustments. Things can change during the building process and keeping an open mind to changing priorities might require taking from one area of your budget in order to fund anything that might have become important along the way. There even exist clever apps designed to help you maintain a clear picture of your budgeted finances.