Before buying a custom home, there are a number of steps to take. You want to make sure you put yourself, and your family, in the best place to succeed moving forward, both financially and without worry. Buying a home is no small decision, and since you’ve already decided on the area in which to live, you now need to know exactly what you want and exactly what you need to get there. Here are some factors to keep in mind before you buy a custom home.
- Choose Your Plot of Land
If you’ve already inherited a plot of land, that is terrific! In that case, you can skip this step. However, if this is still on the todo list, ensure you’ve secured your land before seeking out someone to build your new home.
Now how do you choose a good plot of land? First, make sure you work with an expert who specializes in this real estate market. A land agent should have experience working with plots and know exactly what to look for. While having everything go through a real estate broker might be tempting, hiring an experienced land agent would be advisable before securing your plot of land.
- Know Your Credit Score
Next, be sure to know where you and your significant other (or whomever is co-signing on the home with you) stand with your credit scores.
Many times, people are coming from a place of past financial hardship. In this case, those previous experiences may be reflected in your current credit score. This is a very common scenario. However, you may need to take steps to bolster either or both of your credit scores before you are able to move forward with purchasing a home.
This can be accomplished through a variety of tasks like actively paying down credit cards while paying current bills on time, as well as confirming that your credit report is accurate and up-to-date. While your financial past decisions stick around for awhile, there may be blemishes on your report that are ready for removal.
There are many ways to repair your credit, so if you’re ready to get started with this process, we’ll be glad to direct you to recommended financial institutions in the area who will help prepare you for home ownership.
It’s important to develop a long-term plan for repairing your debt issues and make sure to be more careful moving forward to ensure similar issues do not arise again. The credit bureaus want to see progress, and if you put together a foolproof plan, you should be in business in no time!
- Get Pre-approved for Your Loan
As you are likely aware, purchasing a new home will be a much more simple process if you know what you will be approved to spend. This will be determined based on your past credit history noted in your credit report, any current debt you’ve accrued, the amount you’ve saved for a down payment, if applicable, and your current job history and salary, among other variables.
Once you are approved, then decide how much you are willing to spend. If you’re lucky, the amount you are approved for will be more than you needed. Do not feel like you have to use the entire approval amount. Instead, speak with your financial institution and homebuilder to really understand what you can afford versus what you need to spend to build the home you want.
- Find Your Custom Home Builder
This is an area where you’re going to have to put in the work to get the reward. First, whether it’s through word of mouth from friends or family or research on the internet, you need to develop a list of potential homebuilders. This list can be as broad as you’d like, but the larger it is, the longer it will take to sift through the potential contractors. With a major decision like this, that’s not necessarily a bad thing.
You want to make sure you leave no stone unturned. Your local home builders association could have a list of who they’d recommend. You may also wish to consult your local Better Business Bureau for company information and ratings. Once the list is finalized, contact each one to schedule a sit-down meeting. Once you’ve gone through this step, you are prepared to make an informed decision. Then you’ll be in business.
- Understand What You Can Afford
We all know money doesn’t grow on trees, and budgets are tight, so it’s important to be wise with your spending, and a lot of that is built around planning.
So, before you buy a custom home, have an idea of exactly what you want and what you can afford. Make a list of everything you want in your home. Then, go over each item and decide what’s a must-have versus a want-to-have. Next, review this list with your significant other, if applicable.
During this process, consult with your local homebuilders’ associations for advice. Lean on the experts to break down what you should be considering when constructing your new home. While some items may be tempting, as you walk through this step with your contractor, you will come to learn what you’re willing to let go and what you really don’t want to live without.
While we know you’re excited about buying a new custom home, it’s important to take the necessary precautions to make sure you do what you need to do to put yourself in the best position to succeed. That means settle up your credit score, do your research, and know exactly what it is you want. Follow these steps and it’ll only be a matter of time before you and your family have a new place to call home.