HOME BUILDING STEP-BY-STEP PROCESS

Find & purchase land/lot. Check out our map for featured areas in Western North Carolina where lots and land are for sale!

Research type of house you want & finalize your budget. Consider number of bedrooms & bathrooms, general layout and number of levels or floors. If you are not paying cash, then be sure to read the accompanying article “Understanding New Construction Loans.”

Research and hire the building team. Hire a general contractor or custom home builder who will oversee the construction from start to finish. Keep in mind the average build will involve 22 subcontractors.*

Get the required permits. Your contractor will connect with local municipal office to review your plans. They will be well-versed in required permits & may possess a rapport with municipality, potentially expediting the process.

Clear the property. Remove debris, trees, brush, and rocks from the building site. Ensure stumps and root systems are removed to prevent re-growth.

Level the site. Level the ground & fill in any holes. Drive in wooden stakes to mark out where the foundation should be poured.

Prepare the land for the foundation or basement. Dig holes and trenches for the foundation, utilities, and septic.

Build the envelope. “Building the envelope” refers to everything that separates the internal building from the external environment. This step includes installing footings, pouring the foundation, installing drains/sewers/ taps, having the foundation inspected, building the frame, applying sheathing to exterior walls, and installing windows and exterior doors.

Install critical systems. Install HVAC system, rough plumbing, have inspector evaluate plumbing, install electrical wires & panels, get an HVAC & electrical inspection, install roof, insulation installed, drywall hung.

Designer touches. Paint walls, exterior finishes installed, flooring laid, windowsills and trim completed, cabinets/vanities light fixtures/outlets/ switches, countertops & appliances installed, landscaping and hardscaping.

Clear to close. Final home inspection, final walkthrough and closing!

*“The Average Home Takes 22 Subcontractors to Build.” https://www.fieldpulse. com/academy/building-homesubcontractors/ March 30, 2018

Understanding New Construction Loans

Embarking on a new construction project can be an exciting yet daunting endeavor. If you are not paying cash, then securing financing is a crucial step in the process. New construction loans offer a specialized form of financial support tailored to the unique needs of building from the ground up.

What are New Construction Loans?

New construction loans are short-term loans designed to fund the construction of a new property. Unlike traditional mortgages, which are typically structured for completed homes or buildings, these loans provide financing for the various stages of construction.

How Do New Construction Loans Work?

The loan process typically involves several phases:

• Application: You'll submit detailed plans and cost estimates for your construction project.

• Approval: Lenders evaluate your creditworthiness, project plans, and financial stability before approving the loan.

• Disbursement: Funds are released in stages or "draws" as construction progresses. This ensures that money is available for each phase of the project.

• Conversion: Once construction is complete, the loan may be converted into a traditional mortgage or paid off with a lump sum.

Types of New Construction Loans

• Construction-to-Permanent Loans: These loans combine construction financing and long-term mortgage loans into a single package, streamlining the process for borrowers.

• Stand-Alone Construction Loans: These loans solely cover the cost of construction and must be refinanced or paid off once the project is complete.

• Renovation Construction Loans: Designed for projects involving significant renovations or rehabilitation of existing structures.

Key Considerations

• Down Payment: New construction loans typically require a larger down payment compared to traditional mortgages, often ranging from 20% to 25%.

• Interest Rates: Interest rates for new construction loans can be higher than those for traditional mortgages due to the higher risk associated with incomplete properties.

• Construction Timeline: Lenders will assess the feasibility of your construction timeline and may impose deadlines for project completion.

• Builder Requirements: Some lenders may have specific criteria regarding the qualifications and experience of builders and contractors involved in the project.

New construction loans offer a tailored financing solution for individuals and developers embarking on construction projects. By understanding the intricacies of these loans, including their structure, requirements, and potential risks, borrowers can navigate the process more effectively. Working closely with lenders, builders, and other professionals can help ensure a successful outcome for your new construction venture.