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Is this realistic?
To keep this short I am wondering if any of you could tell me how realistic my thoughts are on building a house in another year or two.
I live in the Midwest near a larger city- essentially it would cost about $50K for 2-5 acres of land. What I am wanting to know is if it is realistic to build a very basic- ranch style house i.e. 3 bedrooms, 2 bathrooms, kitchen, dining area, living room, then have an unfinished basement below for about $150,000?
My dad does construction work but there are many new codes and laws that he couldn't do our electrical etc but he could pour the foundation for our basement and put in our septic tank as well as many other things I'm sure that aren't necessary to meet state codes.
My soon to be hubby (in September!) and I have not yet been approved for a loan but we both have great credit. No debt and based on my research and our income I believe we would likely be approved for a $250,000 loan. But I think we both would like to still to 200k.
Any suggestions or thoughts? Thanks so much!
Re: Is this realistic?
I also live in the Midwest ( Missouri), and I would say maybe. It depends on where you want to live. Would it be in a suburb of a big city or further out. In addition, would you be in a subdivision or would you be more isolated.
But I think that would be possible. Not easy but possible.
Again, it just depends on the location. I know it probably wouldn't work where I currently live, but would work by my parents ( that also live in a small town outside of STL).
I would also explore your options. Some cities or subdivsions don't have as many rules, or the rules are in place to protect home values.
It varies by location.
What would a comparable new home in your area cost?
Size? Amenities? Landscaping? Garage? Driveway? Qualities of materials? All these play into your total.
What kind of heat? AC needed?
Decide what you can afford for your housing expenses (DO NOT go by what a lender will loan you!!!)
Discuss financing with lenders as it will be different than financing an existing home.
In my rural area in the Midwest, you could not do this unless it was a small ranch, with builder grade finishes (no granite etc)
Remember you will need to purchase appliances, and decorate and furnish this house. Yard care, and any snow removal are part of your expenses .
I've never looked into it much, so I might talking out of my a** here, but I'm assuming if you are building the house yourselves you would initially need a construction loan instead of a typical home loan. From what I understand, those can be quite difficult to get. You need stellar credit and there is a more red tape to jump through. Also, the bank will put deadlines on completions and if you miss your deadlines, the interest jumps to astronomical levels until the completions are met.
A lender would certainly have all the details on what is involved, but it is just something for you to think about if you haven't already.
For example, I wasn't even looking to build a house, but some of the homes I looked at needed substantial enough repairs that I would have needed to a small construction loan with the mortgage to fix them up. My lender basically told me, "No way, no how!", my credit was nowhere near good enough. My credit score was good, but not great.
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