So, you want to build your dream home?
Getting started might be the easy part if you are thinking of a new build. Finishing with your finances, and your sanity, intact are another matter! Do not be dismayed, it can be easy-peasy if you hire a reputable general contractor to oversee the project. But, if you’re like me and prefer to do things the hard…er, I mean, if you like to learn a lot while taking on a huge project, then it might suit you to oversee your own build. Let’s dig into some basics.
Vacant land – if you are going to be building in a town with services, this part is quite simple. However, if you have scoped out a rural property that needs everything (well, septic, hydro) installed, things get a little more complicated.
For starters, most financial institutions would like for you to already own the land that you will be building on. There are exceptions, of course, and some banks will finance a portion of raw land (typically 50%) or incorporate your home plans along with the land for a construction mortgage.
Construction mortgages are generally more expensive because their interest rates are higher, but the good news is, once you finish your home, you can put a conventional mortgage on it at a lower rate. The bad news is you will not be getting all your money up front. Instead, you will have to meet milestones, in other words, have inspections and appraisals done at various stages of construction, in order to access further funds. Because of this, it is important to stay on schedule and plan carefully with the building inspectors and appraisers so that they are available when you need them.
So, what comes first? Plans, building permits and construction insurance. Then, you’ll need soil sample tests for the health unit. Sample results, and a detailed plan, are required for a septic permit. The results of the soil test (i.e. drainage), combined with the size of your home are the biggest factors in determining the scope of the septic tank and field bed. This can range from $10,000 – $50,000.
Next will be your water source and hydro. Water can be as easy as a sand point just a few feet into the ground or as complex as 350-foot+ drilled well. At last check, $10,000 will get a well driller on site, but costs could run upwards of $40,000 depending on depth and water quality.
As for hydro service, you will need a plot laid out for where your home will be built, or have the foundation completed, for a hydro quote. There is a lot of work that you can do yourself to save money (for example, putting in your own conduit for underground installation), but, unfortunately, for a large portion of the process, you will be at the mercy of the hydro company. This can run you a couple thousand to several tens of thousands of dollars.
Aside from move in day, framing and “closing in” are probably the most exciting part of the build. Your dream home is taking shape! Understand, however, at this point, you aren’t even halfway there. Patience will be a virtue for the next several months, as finishing carpentry is the most arduous task.
It will be hard, but I promise, once you move in and get cozy in your new place, it will be worth it!
