Steps to Consider Before Building Your Dream Home
April 2, 2021
You’ve been dreaming of building your ideal home, and now is the time to make that dream come true. But before you jump in, there are a few things to consider. The experienced team at Mlend is here to offer some helpful advice.
Step one: Set a budget.
Every dream has some reality mixed in, and the first part of that reality is a budget. According to financial experts, you should aim for mortgage payments (including property taxes and insurance) that are no more than one-fourth of your monthly take-home pay. The National Association of Home Builders (NAHB) estimates that the average cost to build a new home is approximately $428,000, based on a 2,800 square-foot, single-family home. That’s about $153 per square foot, but that’s just for starters. Lots of other choices play into the final costs of your home build, such as size, location, labor, materials, and other details. NAHB estimates that, on average, 55.6 percent of the final sales price goes to construction (cost of materials, labor, and subcontractors), with 21.5 percent to finished lot costs, and 10.7 percent to builder profit.
Step two: Assemble your team.
The experts at Mlend would be honored to be part of your homebuilding team. Our loan programs can help you build the home of your dreams. These programs make the construction process easier by providing one loan to pay for both construction and long-term financing. Most of our programs can provide a predetermined construction period during which the loan is interest only. Once construction is done, the loan will convert to a traditional fixed or adjustable-rate mortgage (ARM).
Mlend offers construction and rehabilitation loan programs that are either government-insured or conventional. With our programs, financing is based on the final appraised value of the home after construction is complete. All financing is combined into a single loan, saving you both time and money. Additionally, we offer interest rates in 15- to 30-year terms.
Our “Construction to Permanent” financing program is an ideal way to make your dream home a reality. Your home can be a primary or secondary residence, but must be owner occupied. This program offers the following:
- Only one set of closing costs
- 12-month construction period
- Flexible interest rate term options
If you’ve found the perfect location for your dream home but aren’t quite ready to build, Mlend can help you, too! Our “Lot/Land” loans offer 80 percent and 90 percent financing options for improved land loans and 65 percent financing for raw land loans. Whenever you’re ready to build, Mlend can finance the project with our Construction to Perm program.
No matter what you need, Mlend can help you on your journey to building a new home. Call us today to add us to your team.