Building your dream home can feel overwhelming at first. Where should you start? What do you need to consider when it comes to where you’ll build your home, choosing a general contractor (if you decide to work with one), or how you will receive the funds for the project? Dive into all these questions and more on the home construction process below!
Location and Land
The first decision to make when building your dream home is choosing your dream location! Where do you want to build your home? Do you already own land, or do you need to purchase a home site? Either way, visit your local planning and development department to ask about flood plains, toxic waste, and zoning limitations to ensure the type of home you’re planning on building will work on the property. You’ll also need to see what the cost of adding utilities such as sewer, gas, electricity, water, and more would be, and contact the health department for a perc test.Planning: DIY vs Contracted Build
Now it’s time for the home planning research to begin! Will you be hiring a builder or acting as your own general contractor? If you plan to work with a builder, make sure you do your research. Find a reputable builder through attending home tours, getting recommendations through word of mouth, and even asking your county zoning commissioner for suggestions. Make sure you obtain several detailed price quotes from your top builders, and tour homes they have built to help you choose the builder that’s best for you.One unique benefit of working with GreenStone is the ability to act as your own general contractor throughout the home construction process. If you choose to act as the general contractor for your project, you will be responsible for overseeing the build from start to finish, coordinating subcontractors, managing the budget, and more.
Ask yourself, “Am I capable of doing the labor myself, or know anyone that can help me? Do I have time and energy to make phone calls, complete the paperwork, handle scheduling of the project, and supervise the build?” Answering these questions honestly will help you make the right decision for you.
When to Talk to a Lender
The first step in working with your lender is obtaining a pre-qualification to know how much you can afford. Once your construction documents are completed, including the sworn statement, dwelling specifications, and blueprints, your lender will review them.
- Your sworn statement acts as a detailed breakdown of the cost of the entire project. It lists who is doing what work and how much each subcontractor will be paid.
- The dwelling specification worksheet lists the detailed materials used in the construction of the home, such as flooring, finishes, fixtures, and more
Once all documents have been reviewed and your loan has been approved, the title work and appraisal will be ordered. After the review of the title work and appraisal, the clear to close will be issued and a closing date will be scheduled.
The Draw Process
So, what is a draw? The funds for your construction process will be released in what are called draws, not all at once. This will help manage payments to all of your subcontractors.For each draw, you will need to submit a notarized sworn statement along with all receipts, bills, or quotes to the title company and notify your lender. The title company approves the draw request and issues the endorsement. Your lender will then issue the funds, and you will secure the lien waivers prior to your next draw.
Completing Your Build
With a home construction loan from GreenStone, our team will be with you every step of the way through the process of building your new home. Your dedicated construction disbursement specialist will be your primary point of contact and will handle your draw requests as well as any documentation and communication with the title company.
Throughout the construction process, you can typically expect four inspections to ensure that the progress of the project is aligned with the funding requests you have made. Inspections by the appraiser are typically done:
- After the footings are installed
- At around 50% completion of the entire project
- Again at around 75% completion
- At completion
Once you have completed the construction of your home, there are just a few final steps left. Your final inspection and final draw will be completed at this stage, as well as obtaining a certificate of occupancy from the county.
What to Consider Before Building
No matter the type of home you’re dreaming of building, doing your research and thoroughly preparing prior to beginning construction is the key to a successful home building process. Do your homework early, and don’t be afraid to spend time doing research. The more planning that can be done upfront, the smoother the process will go.Home construction is often the largest investment of a lifetime, so preparation is key. If you are interested in learning more about the home construction process or what it might look like to act as your own general contractor or subcontractor, register for one of GreenStone’s free home construction seminars online or in-person here.
Ready to dive into the home construction process? Click here to start your home construction loan application or contact your local GreenStone branch with any questions!
