Budgeting for new home construction can be daunting, especially if it’s your first time undertaking such an endeavor. The process requires a thorough assessment of your assets and a flexible attitude toward the design and finishes. The guide below will help you set realistic budget parameters that leave room for the unexpected.

How to Budget for New Home Construction

Figure Out How Much to Spend

The biggest mistake first-time homebuilders make is overestimating what they can afford. To make a realistic assessment, calculate your total household income and assess the amount of money you can put down to supplement your lender, which should be at least 20%. Your final monthly mortgage should not exceed 25% of your monthly income. A loan officer will help you determine the maximum budget you can comfortably afford.

Estimate the Cost per Square Foot

Construction costs vary by region, so do your research on the average cost per square foot for a new home construction. One method is to locate a house in your area that’s almost identical to the size you want to build and find out its sale price. Subtract the cost of the land and the general contractor’s overhead and profit to secure the total construction cost. Divide the final number by the house’s square footage to get an idea of what your custom build would cost.

Set Your Priorities

Once you have a realistic understanding of what you can afford, compile a list of priorities for your contractor. Separate the needs from the wants for the new home construction. The contractors will do their best to incorporate all your “must haves” and as many of your “nice to haves” as the budget will allow.

Secure the quality home construction you deserve by working with Hampshire Home Builders of Capon Bridge, WV. These professionals have been building custom homes for over 33 years and are commended for their dependability and accuracy. They work with only the finest materials in the industry and are committed to helping clients stay within budget. Call (304) 856-3875 to speak with a representative or visit their website for more information.