Insider Tips About How To Buy Land And Build A House

Having a home built to your exact specification appeals to many homeowners. Moreover, building your own house has many great advantages. Yet, the process can be intimidating. When you want to learn about how to buy land and build a house, rely on Clear-Cut Building.

With decades of experience, we can guide you through buying land, obtaining financing, and selecting contractors. In the process, you can save thousands of dollars.

What To Consider Before You Buy Land

Unfortunately, many consumers think about the floor plan before they consider the plot of land. Yet, your choice of land can have the greatest impact on your costs and even your ability to build.

Before you buy a piece of property, you need to make sure you can build on it. Not all soil types can support the weight of a house. So, before you buy land, you want to do a soil test. Additionally, you need to make sure the soil is free from harmful contaminants and toxins.

Moreover, many rural and some suburban areas don’t have access to a municipal sewage system. Without a sewer system, you’ll have to install a septic system. For a properly working septic system, the soil must drain properly. A perc test will assess the ground’s ability to percolate or drain.

If the land fails the perc test, alternatives do exist. Yet, alternative on-site waste treatment systems can be expensive.

Then, too, you need to consider your municipality’s minimum building distances. Setback distances from roadways, property lines, and septic systems often vary between municipalities. Will the proposed location of your home conform to the town’s building laws?

Finally, consider the location of local utility lines. Generally, you’ll have to pay to connect to existing lines. However, depending on the proximity to the lines, you may have to pay to extend the lines to your house.

Financing To Build A Home

Before you spend a lot of money on blueprints, you should apply to a lender to get preapproved for financing. Knowing how much you can spend will help determine your floor plan.

Similar to a traditional mortgage, your lender will want to review your financial situation. Lenders look at your credit score, income to debt ratio, and down payment. Furthermore, not all lenders offer new construction loans. You can use this tool to find and compare lenders offering financing for new construction.

Generally, financing the purchase of undeveloped land is a bit harder to find. Yet, lenders exist who will loan you money for a raw piece of property.

You Need A Construction Loan To Build Your Own House

When you’re shopping for financing, ask the lender for the particulars of their loan:

• Type of construction loan
• Interest rate
• Closing costs
• Schedule for building draws

Typically, you’ll find two different types of construction loans, construction only and construction to permanent. Construction-only loans are short-term loans in effect only until the completion of the home. Once you finish the home you need to refinance with a traditional mortgage.

Whereas, a construction to permanent loan automatically converts to a traditional mortgage upon completion of the house. Thus, you only need to undergo one application and closing process.

Generally, construction loans are variable rates. This means your rate will fluctuate throughout your term. However, lenders differ in their provisions. You’ll find a diversity of initial rates, down payments, and minimum credit score requirements.

Moreover, closing costs may also vary by lender. By law, lenders must disclose the annual percentage rate (APR) for their loans. The APR includes the interest rate as well as some closing costs and origination fees. By comparing APRs, you can determine the true cost of the loan.

Finally, the draw procedure may vary from lender to lender. Unlike a traditional mortgage, the lender disperses funds incrementally. Each lender may have a different number of preset draws which may not coincide with your construction schedule.

FAQs About How To Buy Land And Build A House

Building your own home can be a smart investment. Below, we’ve answered some of our most commonly asked questions, but we’ve only briefly covered the subject. If you have additional questions, call us at 336-602-3662.

How Do I Find Available Land For Sale?

Search the internet and you’ll find many websites selling vacant land:

• https://www.landwatch.com/
• https://www.landflip.com/
• https://www.landandfarm.com/
• https://www.landhub.com/
• https://www.landcentral.com/

You can also use a local real estate land agent. A land agent specializes in the buying and selling of undeveloped land.

What Does It Cost To Build A House?

Comparatively, a new construction home is not necessarily more expensive than existing construction. Ultimately, the cost to build your home is in your hands. Your cost depends on the location of the land, the square footage of the home, and your choice of materials.

Additionally, when you partner with Clear-Cut Building, we can help you save thousands of dollars by eliminating the general contractor. With our help, you’ll manage the entire process from designing your home to choosing contractors.

How Does The Clear-Cut Building Process Work?

Building a custom home for the first time can seem like an impossible task. However, the process of how to buy land and build a house is simple when you partner with Clear-Cut Building.

We help coordinate the building of your home from the very beginning to the end:

• Property selection
• Floor plan
• Material choices
• Financing
• Permitting
• Subcontractor selection
• Scheduling

Plus, we can save you thousands of dollars over traditional custom-built homes. When you partner with us, we help you act as the general contractor eliminating this expense.

Are you ready to build a home to your exact specifications? Book your appointment today by calling 336-602-3662.