Building a new home is exciting, there is no doubt about it. Many people will never experience what it is like to live in a brand new home, let alone live in one that they are customizing. Building your own home means you get to design the home around the way you live your life. You get to take all of your knowledge of living in homes and turn it into creating one that is just right for you and your family. That’s an amazing journey full of excitement and satisfaction. And while there are bound to be bumps along the road to a new custom home the thrill of the experience and the finished product are alway worth any sacrifice.

If you’re like most homeowners you won’t want to move two times so it’s important to do a lot of planning up front, before any ground is broken. It’s important to time the sale of your current home to the completion date of your new dream home and with these three steps you’ll be able to pull it off with ease.

1. Financing – The best way to avoid moving twice is to secure financing for both homes. Not everyone can do this so if it isn’t possible for you to qualify to own two homes at one time then skip to step #2. If you are able to secure financing for two homes at one time then here’s what you need to know.

Construction-to-Perm Financing is the the best way to finance the construction of your new home while living in your current home. In a nutshell this financing is two loans combined into one. The first loan is short term, normally 3 – 12 months to cover the construction period, and the second loan is your end financing.

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    • You’ll need to provide your full down payment up front. If you don’t have access to the cash in your current home you’ll need a home equity line of credit on your current home or have access to the cash from another source.
    • A draw schedule is set up to pay for materials and labor as construction progresses. There are typically four draws during construction.
    • You pay interest on the money that is drawn only, no principal payments are required during this time.
    • Your lot can be purchased with the first draw using this financing option.
    • Be sure to check with your tax professional if the interest payments are tax deductible.
    • When construction and final inspections are complete, the lender will modify this loan into your end loan. You only pay one set of closing costs and a small administrative fee to set up construction-to-perm financing.
    • Your appraisal is completed up front based on your final plan and home specifications. You have the actual closing before construction starts and sign all the paperwork for your mortgage. The final modification only takes a few minutes and there is very little paperwork.

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2. Selling Your Home. The sooner you have a buyer on your current home the more leverage you have with the closing date. Your home will sell for more money if it sells quickly so it’s important to find a buyer fast. If your home sits on the market for more than a couple of months, it becomes stale and you’re going to have to reduce the price and/or accept a lower offer.

You’ll want to be sure you home is in the best condition possible so it’s important to fix the little dents and bruises that come to a home from day to day living. Repaint the living room and entry way and have the carpet professionally cleaned. Remove any clutter that has accumulated over the years. It’s memories to you but to a potential buyer its something that gets in the way of them imagining their possessions in your home. Consider hiring a professional stager to make your home look appealing to potential buyers.

This can seem like an overwhelming task to get your home ready. Don’t worry, we can help. We can help you find the trades you need to help you fix any items in your home, no matter how small. We also work with many design professionals who can help with staging.

3. Design and Selections. While you’re getting your home ready to sell you’ll want to finalize the design and selections for your new home. We’ll finilaze your pricing and complete the land survey. We can even apply for a building permit.

Doing the design and selection work up front can save months of time and give you much greater flexibility in timing your closing date with your construction schedule. If you need more specific details on your situation feel free to call Jeremy at 763-441-1945 for more information.