Is there a loan officer you're looking to apply with?

Please create an account to get started!

Please choose your loan advisor:

A sunny home under construction

7 ways to save when building a house

When it comes to building, the general rule for keeping it affordable is to keep it as simple as possible. A simple crackerbox-style house on a flat lot in a subdivision with utilities is going to be much more affordable than a Victorian house in the woods built into a steep hill.

1. Work with your lender to find your budget

Before you even start looking at house plans, contact a trusted local home lender that offers construction loans to see what you qualify for and what your best option is. A good lender will take time to get to know you, your financial goals, and help you come up with a financial plan to build a new home you can afford for many years to come.

2. Find a simple home plan

Houses with a small square footage but complex design will cost more to build than you expect. When selecting a house plan, look at the footprint and roof. The structures with the most basic footprint (think of a house that’s just four exterior walls) and simple roofline (a roof that looks like an inverted V without any dormers) is the most economical to build. When it comes to the interior space, consider where plumbing is located. Plans with bathrooms, kitchens, and laundry rooms clustered together are more economical to build.

3. Build up, not down or out

Foundations and roofs are expensive. To keep your build more affordable, limit both. If you need more space, pick a simple two-story house with a small footprint over a single-story ranch.

4. Find a flat lot

Building on sloped land brings a lot more challenges than flat ground. If your building site is already sloped, your builder will have to level it out. They can cut into the ground to make it flat, they can bring in soil to fill in the plot and make it level, or they can build the home on supporting wood or steel columns. All of these options add additional costs you wouldn’t have if you built on a flat lot. You’ll also find that drainage and sewage will be more difficult and more costly when you’re building on a hill.

5. Find a lot with utilities

Bringing in utilities is expensive. In order to begin your construction project, your builder will need a power source. If, as example, you purchase a lot that doesn’t have electricity going to the build site, be sure to understand the cost of bringing it in. Most power companies will install service lines for free – so, perhaps from the road to a build site that’s 100 feet away. But if your build site is down a half mile driveway, you will likely have to pay for the wiring to bring electricity to your site. The cost can range between $25 to $50 per foot. For a half mile, that could be between $66,000 to $132,000. If your site doesn’t already have water, you’ll have to put in your own well.

6. Contact builders to get an estimate for the plan you want to build

If you have a basic house plan and an idea of where you’d like to build, most home builders will be willing to give you a rough estimate of the cost per square foot. As you call around, you’ll find that some builders specialize in luxury homes while others focus on homes that are more budget-friendly. Eventually, you’ll find one that fits your budget and home style. Be sure to find out how busy they are and when they’d be able to start the build. These are both important factors to consider – especially if you’ll be renting an apartment during the build.

7. Affordable finishes

At some point during your build, you’ll have to start making choices about what kind of finishes you’d like. Consider linoleum or carpet instead of wood flooring. Or laminate countertops in place of granite. Consider basic rods instead of closet cabinetry. These finishes can always be upgraded in a few years if you decide you really want them.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Started in Less Than 10 Minutes

Get pre-approved with our online mortgage application. It’s simple, fast & secure!