Building your own home

I want to "BUILD" my home! How can I do it?

For most people, part of “The American Dream” is OWNING your home. Sometimes people choose to extend that dream and BUILD their home.  This might sound like an overwhelming process! However, if you partner with your lender and contractor, building can be simpler than you think.

To start, visit your loan officer to ensure you are pre-approved for the needed dollar amount. If you have not already done so, you will need to purchase a plot of land. This may mean you own that plot outright or take out a loan. Generally, owning the plot outright is beneficial because you can use the equity in the land as part of your down payment towards the build.

Next, once you know your desired house’s price range, meet with your contractor and discuss your options for styles, cost projections and blue prints of a home that would meet your expectations and budget. This new construction can be done as a stick-build on site, or through a modular home provider (modular homes are pre-packaged homes that can be customized and are built under a roof in a warehouse then delivered).

Once you have all cost projections, blue prints, and details coordinated with your contractor, bring those items to the bank. We would have your outlined home appraised for value based on current cost of materials/labor and the location.

After the appraisal value is approved, we then set up your “Construction Loan”. This loan is the line of credit used to pay contractors, sub-contractors and other necessary vendors involved in the home building process.  Clinton National Bank has an experienced administrator who would work alongside your contractor to review bills with you and pay out invoices as needed. We would also make sure lien waivers were signed to ensure no one placed a lien on your new home for work done but not paid. During this process you will carry builders risk insurance on the home construction and move to full homeowners' insurance as it is completed.  

Once your home is fully constructed, a second "END" loan is prepared (similar to a refinance and it will pay off the construction loan) and will be your final mortgage loan with the bank. While this is a two-step loan process, you only pay one origination fee and one appraisal fee (with multiple evaluations during the process) with the bank.  There are many variables to each home building process (some based on location, rural vs city, but some just on building preferences, etc.), but the team of lenders and staff at CNB look forward to working with you and your approved contractor to understand those items every step of the way!

 If you'd like to discuss further, contact a CNB Real Estate Lender today!