Tips & Advice
How long does it take to build a house?
The time it takes to build a house varies, with the average time of the construction being 6-7 months from the time the permits are approved. If a customer chooses a personalized production home in a development, the construction phase can take only 4-5 months.
Custom homes take longer, for a few reasons: before the permits are approved, the custom design, floor plans and pre-construction process has to be complete, and this alone can take a few months. Getting financing and choosing a contractor can also add time to the process.
All home builds can be delayed due to weather, permit and inspection delays, waiting on construction material supplies, and disagreements between homeowner and contractor on design details.
Is it cheaper to build rather than buy a house?
It is not easy to figure out whether it’s cheaper to build a new house rather than buy. Industry reports show that the final price of a new construction home is significantly higher than buying an existing home. However, this isn’t necessarily an accurate side-by-side comparison, since new builds tend to be larger, more energy efficient, and more customized in terms of features and materials. Pre-existing homes will often end up requiring significant repairs, and ongoing upkeep.
What is a general contractor?
A general contractor is a company or individual that oversees an entire construction process and is responsible for pulling permits, liaising with inspectors, hiring subcontractors, working with homeowners and designers, and handling day-to-day oversight on the construction site.
How much does it cost to build a new house?
The cost to build a new house varies widely and is affected by many factors including the market, the specific location, the size of the house, what kinds of materials will be used, and what kinds of special features will go into the house. To get a better idea for price of new homes, start by researching comparable new builds in the area and neighborhood you’re interested in buying. Speak with architects and builders in your area. Also, read local blogs and trade websites. In general, the cost per square foot of a new development is $150.
How to choose a home builder
Choose a home builder based on their reputation for quality work, their style (it should match what you want in a home), their price, how busy they are, and how well they listen to and understand your needs. Take lots of time to research and interview. Read plenty of articles and profiles, ask people you trust for their recommendations, and ask your potential builders as many questions as you need to before committing. This is a major decision and above all you should not feel rushed or boxed into a decision.
What is a reverse mortgage loan?
A reverse mortgage is a type of mortgage loan that's open to homeowners who are 62 or older. These loans allow these homeowners to convert a portion of their home equity into cash. With a reverse mortgage, the borrower doesn't make monthly payments to the lender. Instead, the loan is repaid to the lender via proceeds raised from the sale of the property after the borrower moves out of the home or dies.
How to get a home mortgage
- Take a look at your credit. Strong credit can help you get a mortgage loan at attractive interest rates. Before applying for a loan, take a look at your credit score. A FICO credit score of 670 to 739 is considered good, while a score of 740 to 850 is considered very good or exceptional. If your score is weak, consider taking steps to improve your credit before seeking a loan. You can improve your credit by paying off balances and limiting credit card usage to 20 percent of available credit.
- Know what size loan you can afford. Many experts say your mortgage loan shouldn't exceed 2.5 times your annual salary. Your monthly payment will be dictated by the size of your loan and the amount of your down-payment. You can reduce the size of your monthly payment by increasing the size of your down-payment.
- Get pre-approved by a mortgage lender. Before beginning your home search, it's a good idea to get your loan pre-approved by a mortgage lender. This will let you know how large of a loan you can expect to get. You can use this information to narrow your home search to properties that are priced to fall within the limits of your loan amount.
- Choose a mortgage type. Your choices include a fixed-rate mortgage and an adjustable-rate mortgage, and you can choose a mortgage insured by the government or one that is not.
- Find a home. Once you've found a property you'd like to purchase, the lender will have the property appraised to make sure its value is commensurate with the amount of your mortgage loan. Once the mortgage has been approved, you'll need to do things like order a title search and purchase homeowner's insurance. If you have a government-backed loan, there might be other types of insurance you need to purchase.
- Fixed-rate mortgage. This is a mortgage that has a fixed interest rate over the entire life of the loan. The benefit is that it offers predictable payment terms and the fixed interest rate allows the size of your monthly payment to stay the same year after year.
- Adjustable-rate mortgage (ARM). With this type of mortgage, interest rates change from time to time to reflect current market conditions. In many cases, the rate remains fixed for an initial period, and then it is adjusted on a yearly basis. For example, with a 3/1 ARM loan, the 3 in the name indicates that the loan has a fixed interest rate for the first three years. Afterward, the rate is adjusted on a yearly basis, as indicated by the 1.
- Conventional mortgage. This is a mortgage loan that is issued with no government backing. A conventional mortgage might come with a fixed rate or an adjustable rate.
- Government-insured mortgage. This is a mortgage that is backed by the government, such as Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), or the U.S. Department of Agriculture (USDA). A government-backed loan might come with a fixed rate or an adjustable rate, and typically requires a smaller downpayment than a non-government issues loan.
- Conforming mortgage. A conforming mortgage is one that falls within loan limits set by the FHA. These limits vary by real estate market. Expensive real estate markets like Los Angeles and San Francisco have higher loan limits.
- Jumbo mortgage. A jumbo mortgage is one that exceeds loan limits set by the FHA. In most markets, a jumbo loan is one that exceeds roughly $400,000. However, in expensive markets like New York City and San Francisco, the limits are higher; in these markets, a jumbo loan is one that exceeds roughly $600,000. Jumbo loans usually require higher down-payments and excellent credit.
How to find the owner of a vacant property
- Research the property's tax and mortgage records. These records are usually available online. Tax and mortgage records should be able to provide you with the name and address of the property's owner, and they might also provide you with a phone number.
- Ask the neighbors. In some cases, neighboring residents will be able to provide you with the name of the person who owns a vacant property, and maybe even a forwarding address and phone number. When communicating with neighbors, make it clear that you're someone who's interested in purchasing the property. Otherwise, neighbors may think you're a debt collector, and this could make them reluctant to provide information.
- Hire a skip tracer. A competent skip tracer can help you find the owner of a vacant property. These private investigators are skilled at locating people, and they are often able to generate results within 24 hours. It can cost as little as $20 per search.
What is a mortgage payment?
A mortgage payment is made by a borrower to a lender that has provided a loan used to finance a real estate purchase. This payment typically includes both principal and interest, and it's made until the original loan has been fully repaid. Mortgage payments are typically made on a monthly basis, and these loans usually come with 15- or 30-year terms.