Build your own home if you want to save money on new-home construction. The process is relatively easy. However, you should familiarize yourself with the steps before making the decision to build. Hence, you won’t inadvertently skip a crucial step, and you’ll enjoy a smooth process.
Improve your chances of qualifying for a loan. Getting a new-construction home loan with bad credit is difficult. The mortgage industry has changed, and lenders have tightened their guidelines. If your credit score is less than 620, you may not qualify for financing. Get a copy of your credit report. Check for inaccuracies, pay your bills on time and reduce your debt balances.
Get loan quotes. Choosing the right construction loan is imperative. Get quotes from lenders and brokers, and pick the loan that features the lowest rate and the best terms. Once you've chosen a finance option, the lender opens a home construction line, which pays for building materials and contractors.
Sign the contract. Before the project begins, you’ll have to sign a contract. Thus, you’re obligated to purchase the home upon completion. The contract includes information such as the final sale price, and any negotiated terms. For example, the builder may agree to pay all closing costs.
Attend the closing. The final step is the loan closing. This is where you sign the loan documents, pay settlement fees and receive the keys to your new home.