Planning to build a house? Here are some questions to ask first

While some people prefer to buy a home or a fixer-upper, others choose to build one from the ground up. But a lot goes into creating the house of your dreams, possibly more than what goes into purchasing one. If you’re looking to build a home soon, here are some questions you should ask first.

How much can you afford? What are your payment options?

First, consider if building a home is right for you and your family. If so, make sure you have the budget to cover all the expenses and any surprises, changes, or setbacks that may occur.

You also want to weigh all options regarding construction and home features. For instance, a three-car garage may sound like a lovely idea, but the cost of building one as opposed to a two-car or one-car garage could be detrimental to your budget. Whatever you decide, leave some wiggle room.

Think about your payment options too. Many financial institutions offer construction and mortgage loans to help people in their journey. Speak with an experienced and lending officer about your options.

What should you look for in a construction loan?

Construction loans generally cover the land, plans, permits, fees, labor, materials, closing costs, and contingency reserves. The Farmers of Bank Appomattox currently has custom rates tailored to the builder’s needs and enables new builders to get the funding they need. When construction is complete, the loan is either converted to a permanent mortgage or paid in full.

Here are some options for construction loans:

  • Construction only—requires buyers to be qualified, approved, and pay multiple closing costs. The buyer must pay off this loan when the building is complete.
  • Renovation construction—covers the cost of significant renovations wrapped into the mortgage instead of financed after closing. This loan bases on home value after repairs and renovation.

What are the options for different home types?

If you’re going to build a home, knowing the types and costs is also essential.

  • A single-wide home is a traditional mobile home.
  • A double-wide home is twice the size of a typical mobile home. It’ll look more like a regular house when transported to the site.
  • A site-built home involves bringing all the materials and pieces to the site and assemble them.

Do you need a contractor?

Building a home is a massive project that you want to ensure it is done right. For people who prefer to take the lead on the building plus save money, some states allow you to apply for an owner-builder exemption and sign a building permit application.

On the other hand, hiring a contractor can also eliminate the stress and responsibilities of building a home. According to The Spruce, contractors handle scheduling, inspections, building codes, consistent communications with subcontractors, and the list goes on. While contractors can charge anywhere from 10% to 20%, the investment may be worth ensuring your home comes as close as possible to what you envision it to be.

Will this be a forever home?

There’s much to consider when constructing a home from the ground up. One of the most important questions to ask yourself is whether this will be a temporary or forever home. Your plans will determine whether to build a home.

The Farmers Bank of Appomattox is an FDIC Member and an Equal Housing Lender.

To learn more about the Farmers Bank of Appomattox or speak to a lending officer, visit or call toll-free (877) 405-7797.