ConstructionBuilding your Dream Home in Charleston

The tight inventory of existing homes in Charleston, SC is driving many would-be homebuyers to build a brand new one to fit their needs. Sure, Charleston provides an amazing array of backdrops for beautiful views, but conjuring up a dream home and making it become a reality is easier said than done. Whether you’re starting with a particular plan in mind, or simply a folder filled with pages torn from magazines, you’ve embarked on an exciting journey. Joe Lobert, of Luxury Simplified Construction offers some tips to help you begin the process.

 Choose a builder. Be prudent when choosing a builder and clearly detail your desires and time frame. Make certain you choose a professional home builder that aligns with you vision. Do you like the kinds of residences the homebuilder constructs? To know for sure, ask to see previous projects they have completed. Most reputable builders are happy to provide this information to you. For those wanting to be very involved in the process, look for a custom builder that clearly understands your expectations. You’re going to spend a lot of time with the builder so choose a builder that you are comfortable with. If you want your home to be unique and highly customized look for a builder that seems comfortable with thinking “outside the box.” For buyers who are focused on the cost, find a builder that understands the importance of keeping allowances on budget.

Determine a budget. Establishing a budget will set the tone for the type of home you can afford and how it will be furnished. Work closely with your builder to get a realistic estimate of not only what it will cost to build the house, but also all the features and fixtures that you want inside the home as well. Once you have that number, we recommend you increase the amount by 10 percent to cover any unforeseen changes and additions.

Determine your financing. While many homebuyers fear building their dream house is out of their budget, experts say the loan process tends to be misunderstood. According to JB Belicka, Mortgage Loan Officer with TD Bank, securing a loan for new construction isn’t the same as applying for a mortgage to purchase an existing home. There are two types of construction loans available. The first is a two-step process. Some banks will lend the construction money on a variable rate tied to the prime rate and at the end of the construction period need the loan to be refinanced into a residential loan. This entails two closings which is twice the price. The more popular construction loan is the “construction to perm ” loan. This loan is “interest only ” during construction and then rolls into the permanent residential loan once the certificate of occupancy is issued. This is the most cost effective construction loan as it only has one closing. In both scenarios the homeowner pays only interest on the outstanding amount of the loan throughout the process.

 Building your new home may be one of the biggest investments you make in a lifetime. Whether you start with a sketch on a napkin, or a set of plans you’ve had your eye on for years, there are scores of decisions that you will need to make all along the way. Choosing the right builder, determining your budget, and securing financing are absolutely the most vital.