HOW TO FINANCE YOUR CUSTOM BUILT HOME

A traditional mortgage is not the same financing your custom built home. A mortgage is a loan that allows you to purchase a structure and land. Mortgage financing is easy for anyone who has ever purchased a house. Things are different with a custom built home.

Construction loans are a type of loan you need for your custom built home. However, most people don’t know much about them. We hope this article will help you get a better understanding of custom home financing.

The three main transactions in new home construction include the purchase of land, construction, and a mortgage. You will need to get financing if you want to build a home. However, different institutions may offer different types of loans.

Different Types Of Loans To Fund Your Custom Built Home

To purchase your home site, you can get a loan for a significant amount. The location, size and value of land, as well as other factors, will affect the interest rates and the prices. A construction loan is used to finance the building project. It is designed to allow periodic disbursements to cover the various phases of construction, as they are being built. The mortgage is then taken out for the final home.

Different types of loans

Loans for lots

If you don’t already own the land or plan to pay cash for it, the first loan you need is a lot loan.

• A variety of financial institutions offer lot loans.
• Prices for land and interest rates are affected by the location and value of the lot, as well as the amount of your down payment.
• The land will be more expensive the closer it is to a municipality center.
• The term of a lot loan can be from 2 to 20 years. It can either have fixed or floating rates.

When choosing a home site, consider the location’s proximity to a town or city center, its potential future value, the quality of local schools, and laws regarding land use and zoning. Before you can begin construction, you will need to close the deal.

The bank or lender will need information about your income, your monthly earnings, the total cost of the loan (principal, interest), its duration and your financial history to determine if you are eligible for a lot loan. It is possible that you will need to give information about past events that may have impacted the stability of your finances.

Construction loans

A construction loan is required if you want to finance your custom-built home. Construction loans aren’t available at all banks or financial institutions. A trusted custom home builder would be able tell you which banks provide construction loans, and can help you get the loan.

Construction loans are usually of short duration, typically between 12-18 months depending upon the scope of work. They require a down payment that can range from 20% to 30% of total loan costs. Due to your creditworthiness, a twelve-month construction loan may require a large down payment. The interest rate could be higher than permanent financing (mortgage), depending on your creditworthiness.

There are many types of construction loans.

A construction-to-permanent loan may likewise be referred to as a single close or one-step loan. At the end of construction, this loan will automatically convert to a standard mortgage. You won’t have to apply for another loan again, although the lender might call it a modification or refinance. While payments may be more than a standard mortgage, they may also change during conversion.

A standalone construction loan is a loan that can be used to finance your new home construction. You must repay the loan once construction is completed. If you do not want to pay the loan off, you will need to apply for a mortgage. Prior to the approval of a construction loan, a lender may ask for evidence of pre-approval.

Mortgage-Based Loans

You will also need a mortgage, i.e. For the final home, you will need a mortgage (i.e. “permanent” loan). If you got a C2P loan, you don’t require to pay for another set of the closing costs. Most people use mortgage-based permanent loans to purchase a home. The interest rates you pay will vary depending on how much the house is worth, your financial situation, and other factors.

Traditional Mortgage Loan vs. New Home Construction Loan

A traditional mortgage loan is a long-term financial solution for an existing house. The loan is secured by the house. The loan term can be up to 30 years. The borrower pays principal and interest over the duration of the loan. However, a larger portion of the payments goes towards interest during the initial phase of the loan. It is a smart idea to shop around for your mortgage loan. There are differences in mortgage rates and some providers charge higher upfront fees.

Loan Process

There is a lot of paperwork involved in selecting a financial institution to lend you money. The majority of documentation required for a construction loan are the same as for a mortgage.

• Documentation proving identity
• Recent pay stubs
• Other income proof
• Bank statements current
• Recent tax returns
• Recent statements regarding other assets, such as a brokerage account
• Below is a list of debts that require minimum monthly payments
• Source for down payment
• Other liabilities
• Current mortgage or rent payments
• Self-employed individuals will need to provide their profit-loss statements.

The type of loan will determine the amount of down payment that the lender expects. A construction loan will require a large down payment in order to pay it off. For a multimillion-dollar home, a C2P loan might require 20% down payment. You may be able pay 5% to 10% for a home that is less costly.

The institution must also approve your builder. The institution will ask the builder to show creditworthiness and a track record of successfully completed projects. You are still responsible for the construction loan if something happens. Construction can start immediately after you have secured the loan. 

Benefits of a Construction Loan

One benefit of a construction loan is that they pay interest only. You can save money on your mortgage by paying lower monthly payments. The terms are usually more flexible than traditional mortgage loans. This helps to keep your project on track and within budget.

A construction loan is better than a home equity loan or any other privatized loan.

Construction Loans: The disadvantages

Construction loans have two main disadvantages: higher interest rates and stricter qualifications. The flexibility comes at a higher cost, with higher qualifications and lower down payments. 

Ask questions if you aren’t sure. Building a new home construction in Myrtle Beach may be a once-in-a-lifetime-achievement. You should not expect to be an expert in financing. Talk to your builder or their lender referrals about all options.

Call Dawol Homes now if you need a team of professionals to build your dream home. Our custom home builders will be with you from start to finish. 

Dawol Homes
9404 Hwy 17 Bypass,
Murrells Inlet, SC 29576
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com

HOW DOES A HOME BUILDER PRICE NEW HOMES?

Two types of contracts are used by a home builder to price new homes. These two types are “fixed price” or “cost-plus”. You might be wondering which contract you should choose if you have never built a home before. We will show you both types of contracts so you can make an informed decision when building your next home.

Types Of Contracts Used By A Home Builder

Fixed Price Method

Fixed price home builders in Myrtle Beach will consider all costs involved in building your home. This includes overhead and profit. Then he’ll give you the final cost of the project. Your contract will reflect your final price.

Advantages

Fixed price contracts offer the greatest protection against cost overruns. The custom home builder will have to absorb the cost if your project exceeds budget.

The builder is responsible for any cost overruns. However, this reverse process applies. The builder can keep any profit if your project falls below the budget.

This contract will only show the final price. It does not breakdown the cost of materials or labor.

If other areas of the project are beginning to absorb their profits, then more unscrupulous builders might try to cut corners.

The Cost-Plus Method

Although the cost-plus pricing model is more complicated, many buyers and builders prefer it to the fixed-price method. This method will show the builder’s profit and costs in your contract. A cost-plus contract is different from fixed price contracts. The final price for a home built can change depending on actual labor costs.

Advantages

Transparency is the biggest benefit of cost-plus. You can easily see the costs and profits the builder charges, so you can determine if they are charging too much for the new home construction.

You’ll be less likely to over pay when your home is completed if the project falls within the budget.

The builder is not liable if the project is over budget. Therefore, he is less likely to compromise quality to keep his profits.

You will be responsible for paying more if your home construction project costs increase (or if the builder estimates poorly).

Unscrupulous cost-plus contracts can lead to disputes. If you believe that a subcontractor did poor work, will you be responsible for the home repair and maintenance costs?

Which contract type is best? It depends on you and your builder. Fixed-price contracts are preferred by some homebuyers, while others prefer to have their builders come in under their budget. Other times, the builder you are interested in working with might only offer one type. The best choice is the one that you are most comfortable with signing.

Call Dawol Homes now if you’re looking to build your dream home with the help of an experienced custom home builder. 

Dawol Homes
9404 Hwy 17 Bypass,
Murrells Inlet, SC 29576
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com

BENEFITS OF WORKING WITH A SMALL HOME BUILDER

When you are planning to build a house, the benefits to large builders have been well-documented. Big home builders are commonly characterized as professionals who have deep pockets. They could take full advantage of economies of scale, using this to influence the supply chain and enjoy big discounts on various materials.

However,  to understand these facts without having to point out the benefits of working with smaller home builders Myrtle Beach is to provide you with a short list of benefits. There are many great reasons why you should have your home built by a custom home builder instead of a volume builder.

Home Builders Can Build Your Home On Your Preferred Location

Custom home builders will often work on one project at a time. Because of this, they are not afraid to check out different options  providing you with more choices of where you could build.

On the other hand, big builder tend to think big, which means they are not considering houses but are thinking in terms of developments. To create a development, these big builders must find and get large tracts of land. This is the place where your house will be located. Additionally, these tracts may not located near the urban centers and that means if you do not want to endure a long commute in heavy summer traffic, then a big builder is not going to be your best option.

You Can Personalize Your Home

You will enjoy complete customization if you work with a small home builder. To start with, a custom home builder can work with a wider range of design options, commonly built on one lot. This lets you choose most details of your dream home. Apart from that, a small builder will employ only a few contractors, meaning he will always be on the site. You will have several chances to alter the things that you do not like. Your builder will also accommodate you in certain areas since he is much likely to reside in the area where he works and his expert reputation will rely on your satisfaction.

Custom Home Builders Are More Knowledgeable

A custom home builder is more likely to have built a home that is similar to yours. Having built on a similar terrain, a custom builder can tell you with confidence about the work that can and cannot be done. This prior knowledge can help you save money throughout the course of the building project.

Custom Builds Are Often Higher Quality

One good way that large builders keep their costs so low is by having part of the houses built in a factory, then brought to the location, negatively impacting both the materials and the quality. Custom home builders are less likely to engage in such practices, which means they produce homes that are better in quality.

Small Home Builders Know How Much Home You Need

A home builder who lives in your area is familiar with many things like the local energy costs as well as other important issues. They can offer larger homes for cheaper prices and make sure that you get the home of your dreams.

If you are interested in working with a reputable home builder, call Dawol Homes now.

Dawol Homes
Myrtle Beach, SC 29588
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com

WHY CHOOSE A CUSTOM HOME BUILDER OVER A GENERAL CONTRACTOR

Now is the time to move forward and build your custom home. The only problem is who are you going to hire to build your home. You have to  decide if you will build it yourself or hire a general contractor to do the job. Or will you look for a custom home builder?

The vast majority of custom-built homes were not built by homeowners, but rather with the help of a general contractor or custom builder. Which one should you choose?

General Contractor vs. Custom Home Builder

Before you make your final decision, it is important to understand the role of a general contractor and custom home builders in building your home. You can then make an informed decision and start drafting your house plans and project logistics.

To build home plans, a general contractor may hire subcontractors. Although they might not be experts in new home construction, they have connections with other home contractors. These relationships with general contractors can help you hire the best for your home’s different areas.

The general contractor acts as a general manager for a team of athletes and will gather the talents after the bidding period. They will ensure that subcontractors work within the specifications and they are accountable for completing your project on time.

However, custom home builders in Myrtle Beach can take on all aspects of the job, including drafting and construction. Custom home builders are sometimes called a design-build company. They have all the necessary resources to build a custom home. They usually outsource only licensed tasks like wiring your home or installing an HVAC system.

The Top 3 Reasons to Choose Custom Home Builder

If you are looking to build your dream home faster, with less hassle, lower costs, and a better finished product, consider hiring custom home builders to help with the design, construction, and maintenance of your home.

1. AVOID BIDDING WARS

The bidding war is one of the most frustrating parts of working with a general contractors. Once you have the house plan designs, your general contractor will present them to subcontractors for their best bids. Many homeowners find design-bid-build appealing. You can save money by selecting the one that offers the lowest bid.

However, the company that the offers the lowest bidder might not be the best. It can be difficult to find subcontractors who are willing to pay fair prices and have the experience and skills you need. This can delay construction for several months.

Once you have your house plans, don’t you feel ready to start? Construction can start quickly with custom home builders once plans have been drafted. Without spending hours searching for the right contractors, you can get complete and affordable home construction services.

2. SIMPLER COMMUNICATION

A custom home builder can offer you one point of contact. Your general contractor will not have to coordinate with other contractors. You can simply communicate your ideas to the custom home builder, and they will coordinate for you. This reduces your liability.

If they are able to manage subcontractors properly and have good relationships with them, a general contractor can provide similar effective communication. It is difficult to find a general contractor who has the ability to communicate and manage well. The entire project may be delayed if they lack the necessary management skills.

3. BETTER QUALITY

All parts of the project will run more smoothly under the guidance of a team made up of custom home builders. Floor plan designers and architects work together with the construction team to make sure that the plans don’t clash with actual implementation. This ensures a smooth home-building process which results in better quality and lower costs.

General contractors as well as custom home builders are capable of building a home that you will love. With a trusted team of home builders, you can avoid delays in construction and communication issues.

Call Dawol Homes now if you need help in building your dream home.

Dawol Homes
9404 Hwy 17 Bypass,
Murrells Inlet, SC 29576
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com

 

NEW HOME CONSTRUCTION: CUSTOM HOME BUILDER VS. GENERAL CONTRACTOR

People mistakenly believe that terms such as “custom home builder” and “general contractor”, are interchangeable. These professions often overlap and general contractors can work together to build a client’s dream home. It’s clear that quality new home construction is the result of close collaboration, no matter which party initiated the project.

New Home Construction: Custom home builder VS. General Contractor

A general contractor is someone who oversees the work of subcontractors. However, a custom home builder is skilled in custom building and can complete this type of project from start to finish.

To streamline the process, a home builder will often have a team of people on-site. Custom home builders are not like general contractors. They only subcontract jobs that require special licenses such as electricians and plumbers.

WHAT DO CUSTOM HOME BUILDERS DO?

General contractors don’t usually get involved until construction is complete. Hiring a custom home builder to build a home or condo gives you personal service right from the beginning. The term “very beginning” refers to everything from the initial sketches and plans through the construction and daily excavation. Your custom home builder will handle everything from the initial sketches and blueprints to the day-to-day excavation and construction.

A general contractor may sometimes have their own workers available to help with the many components of a custom built home. A custom home builder is more likely to have an on-call team or in-office staff available to help with any task. If they need to contact other specialists, such as architects or engineers, then a reputable custom builder will have established relationships that can accommodate all of their needs.

WHAT DO GENERAL CONTRACTORS DO?

A general contractor is someone who works with you to build your project. This definition is quite broad and it’s therefore not very different from the work of a home builder for new construction homes in Myrtle Beach SC. However, there are some important differences.

General contractors are responsible for executing project plans. These plans are often prepared by outside experts. Although general contractors can handle many different types of projects they are not usually skilled in building custom homes. It is not unusual for homeowners to need to hire other architects or specialists to draw up plans for the general contractors to get things moving. The custom home builder would normally handle this part of the process.

The general contractor will then work with you to build your home to your specifications. They will hire, schedule and pay all subcontractors necessary to achieve your goals.

BEFORE YOU MAKE THAT CALL, GET ONE FINAL THOUGHT.

Although the roles of general contractors and home builders in Myrtle Beach are very different, they share many similarities. To determine which option is best for you, it’s important to assess your needs before you start a project. You may need to hire specialists, such as architects or designers, and manage some of the project day-to-day tasks on your own if you hire a general contractor.

A custom home builder may be better for large-scale home construction projects, such as the building of a new home. They will be able to execute and manage the entire project from start to finish.

Contact Dawol Homes today to learn more about the differences and similarities between general contractors and custom home builders, or to discuss hiring a custom builder for your next project.

Dawol Homes
9404 Hwy 17 Bypass,
Murrells Inlet, SC 29576
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com

SIX STEPS IN A NEW HOME CONSTRUCTION

It is simple to buy a production house. It is easy to follow and requires little effort. Find a community or builder that you like. Take a look at the models and choose one. Sign the contract. It will take a while for it to be completed. You can move in. Meanwhile, new home construction is more complicated. It is a huge undertaking that will take a lot of time, effort and money.

A true custom home is only possible with advanced planning and active participation. There are many steps that must be taken to build your dream home. When buying a home production, only one of these steps (tracking the actual construction) is necessary.

A custom home is not pre-planned, selected or designed. It takes significantly longer to build a new home construction Myrtle Beach.

Process Involved in New Home Construction

You, as the homebuyer, must take additional steps when building a custom built home. Let’s take a look at the six steps you need to follow when building your custom home.

1) Fashion Your Dream

You must start from the beginning and design the elements you want for your home. Take photos and tearsheets. Visit completed properties. Talk to an interior designer. Start by describing your preferences regarding architectural style, room function and design elements.

2) Choose a Builder/Architect

An architect might be the best person to help you get bids from home builders in Myrtle Beach SC. Some custom home builders also offer design services or can help you locate an architect. Ask your friends and family for recommendations to help you find the right professionals.

3) Get References

Ask potential builders to provide the names of their clients, lenders, suppliers, sub-contractors, and suppliers. Ask them for their opinion: How satisfied were they? Did the project get managed well? Did the builder pay sub-contractors and suppliers on time? How was the construction quality? Ask for samples of contracts, schedules and warranties from your builder.

4) Locate a location and buy your land

It is necessary to search for and purchase land for your dream home. The professionals can assist you in evaluating potential sites for their suitability for building, availability of utilities, and views.

5) Contribute to the design

Your architect/designer will need to discuss the costs and benefits of each option, set a budget and then finalize design details, floor plans, features, and product elements that are most appropriate for your home.

The above elements are not subject to a “typical” time limit. They are also not required when buying a pre-built home. It is up to you how long they take. The process of dream building, site selection and home design can take several months to complete.

6) Track Construction

You will need to make many choices during construction, in addition to the important decisions you have to make with your architect when designing your home. A typical 12-month construction schedule for a custom-built home will require significant buyer input regarding design decisions, product selections, and color choices. This is at least 9 months.

Call Dawol Homes now if you need the help of professionals in building your dream home. 

Dawol Homes
9404 Hwy 17 Bypass,
Murrells Inlet, SC 29576
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com

TIPS FOR A HIGH QUALITY NEW HOME CONSTRUCTION

It all comes down to what you do before you buy a new home construction. To gauge customer satisfaction, do your research on the homebuilders that you are interested in. Ask builders any questions.

Dawol Homes recommends speaking to past clients to find out how satisfied they were with their home, and how the builder handled any repairs or changes. This will give you valuable insight. There is no way to make the process smooth. It is important to trust the builder and get to know him.

How To Have The Best New Home Construction?

A builder should not be trusted if a homebuyer feels intimidated. Your builder should be able to establish a trusting relationship. Home Builders in Myrtle Beach SC who are good at listening to you and ensuring your safety every step of the process will be a great asset.

Also, it is important to look into the relationship between the builder and their contractors. This can have an impact on the quality of their work. This is the lesson. The lesson here?

A third-party inspector may be a good option. However, the new construction homes in Myrtle Beach will still need to pass inspections by county and city building inspectors. Some builders may not allow third-party inspectors. This is not due to anything precarious, but there may be liability issues that could concern your builder. Ask for regular updates to keep you informed.

Although you might be tempted to ignore the inspector, it is best not! An inspector can spot potential problems before you move in to your new custom home. Homebuyers often worry about cosmetic repairs during walkthroughs. Home inspectors will look deeper to ensure that all the “bones” are functioning properly.

Below is a list of items we recommend checking to ensure your home is constructed to the highest standards.

These areas are often neglected during walkthroughs. Are they clean and free from debris? Are there adequate insulation in the attic? Are the ducts properly sealed? Is the wiring clean?

Plumbing: Run faucets and flush toilets to ensure they are working properly. To ensure that the system is capable of handling the stress test, run the faucet and shower. Conducting a stress test will reveal if there are any issues or leaks.

Are the electrical outlets working? Are there any visible or exposed wiring?

Outdoor Areas: Does the grading slope away from your home so that stormwater doesn’t flow away?

An inspector may be needed if you see poor workmanship. Third-party inspectors are often welcome to your home’s final walkthrough. A home inspector is also a good idea if you’re within one year of moving into your new home. They can identify any problems before the one-year warranty expires.

While your new home will be subject to many inspections during the new home construction process, things do happen. You can learn how your builder responded to any past issues or complaints.

It is important to establish a good relationship with your home builder prior to your home being built. This will ensure that you get the best home possible.

Call Dawol Homes now if you’re looking for an expert who can help you build your dream home in Myrtle Beach.

Dawol Homes
9404 Hwy 17 Bypass,
Murrells Inlet, SC 29576
(843) 294-2859
http://www.dawolhomes.com/
info@dawolhomes.com