Financing the construction of your new house has always been the most essential part of the entire construction process; it’s especially true when you consider the climate of today’s market. Those who have planned for this for a long time and have been able to save enough money to fund the construction are lucky enough, because they need to get a construction loan anymore. However, for those that need a loan, they may find that banks and the general market conditions may make it hard to obtain the necessary financing for the project you have in mind. Of course, you can get a construction loan if you meet their requirements.
In this article we will discuss the cheapest way to build a house and other tips to ensure that you aren’t spending more money than you have to.
While we emphasized that home financing is important in building a new house, it is equally important that the house you’re planning to build is also affordable. After all, you wouldn’t want to get stuck with a home you can’t afford, would you? A lot of aspiring homeowners go to realtors to look for a new house to buy, but they are oblivious to the fact that they could save a ton of money if they’ll build their own one instead. You can ask home contractors and they will tell you that most of their customers are very satisfied with building something new rather than buying an existing one, especially with the options possibilities it presents.
Building a new home allows you to prioritize certain parts of the house that need to be built first. Then you can just continue building the rest once you’ll have more money to allocate to the rest of the home construction. This also limits or outright prevents you from borrowing money.
Like any home shopper, you probably have lingering questions on your mind and it’s okay to ask them. Typically, home shoppers would want to know how many bedrooms the house have, how many bathrooms, toilets, whether or not they’ll need a garage, etc. But deciding those is just the start! If you’re having trouble weighing your options, then consider some of these reasons why building an affordable home is much better than purchasing one from a real estate company.
- You control the outcome of the final product.
- You decide how much of your budget goes to each part of the house.
- Building a new house means installing a brand new HVAC; this means you will have to do less maintenance work, enjoy the benefits of energy efficiency, and go a long time before costly maintenance costs start racking up.
- New construction can help you avoid toxins like mold and lead paint.
Deciding to build your own house can be hard, so take as much time as you need to think about it before making that decision. Like a leap of faith, it can be a bit scary sometimes, but if you work with a good building contractor, then making the choice to build your own house can be one of the most rewarding things you will do in your life!
Different Home Construction Methods
Together with your building contractor and your architect will have to talk about the various ways that you could be saving on the construction process, as there may be local incentives you can take advantage of. In the United States, the use of the traditional stick framing method is common when you are building a house as there is an abundance of wood present. However, advancements in construction have come a long way and new methods such as the use of light-gauge steel, modular homes that are built indoors, homes built with structural insulated panels and homes built with reinforced steel and concrete are now possible and increasing in popularity. Here are some modern construction methods that you need to know about before designing and building your new home.
Considering that your primary concern for your house building project is to find out how you can build without spending too much money, opting to build a two-storey home could be the way to go. Most of the money spent in house building will go to the foundation and roofing, so when you construct a two-storey house, you’re actually saving more. In addition, you can’t be unhappy about the additional square footage that it brings! But following the rule of efficiency, you may want to stick to a simpler house design – keep the design square or rectangular and keep the roofing style simple as well, as complicated designs will increase the cost to build the roof.
Simply put, the more complex the design of the house is, the more expensive it is to build it; adversely, a simpler house design is cheaper to build and will save you more money.
You can save a lot on utility expenditures if you spend enough money on insulation when you build your house. Building a house that’s well-insulated from the start will help you save money on your utility bill for many years to come, and you can even save money on buying your very first HVAC equipment because you’ll only need a smaller HVAC system to keep a balanced temperature inside your home. Refusing to spend on house insulation often results in leaks, and that will cause drafts which will make your HVAC system exert more effort to fight it. More effort means more energy, which in turn will cause more money on your gas and electricity bills.
Appliances and Fixtures
According to HomeAdvisor, people often spend $65,000 when building their kitchen – this includes buying all of the home appliances that you need to be able to make home-cooked meals. On the high-end, some people will spend as much as $130,000 to get the right kind of tools for their kitchen with a matching look and feel. However, this isn’t needed if you are on a budget, as you can buy cheap yet useful kitchen appliances that still make it a delight to make home-cooked meals; or you can mix your kitchen range with branded and lesser known brands of kitchen appliances to get more out of your budget.
Again, we are faced with the dilemma of whether to save money and keep the interior design minimal in order to save money, or to spend more per square footage to make it look grandiose. Indeed this is such a predicament! But did you know that there are things you can do to still get the things that you want? For instance, you can opt to install large picture windows to make the room appear bigger. The benefits of this type of window is that it lets more sunlight in, meaning you won’t need a bunch of artificial light during the day.
Another good idea if you decide to go for huge windows is having an open floor plan. An open floor plan is like a living room within your living room and it allows you to entertain a number of guests even if the total square footage of the room isn’t that big.
When talking about the land where you want to build your house on, it really comes down to two things:
- Do you already own a piece of land?
- Are you planning to buy one?
In case you already own the property that you desire to build your house on, then consider a few things before you start. Does you piece of land have shrubs or trees? If so, then how many of them need to be cut down to make room for your house? What is the soil condition of the land? How much will you spend to lay out the foundation for the house? All these things will factor into how much the entire project will cost. Some of the other things that you’ll have to consider include:
- Is the land a flat plain or is it full of hills? Does it need to be evened out? How much will it cost?
- Are there boulders in the area? How much will it cost to remove them?
- Perhaps you have a narrow lot you’re working with, or you have something that would lend itself well to a Mediterranean home.
When you are looking for ways to continuously be saving money over the course of your journey of home ownership, you may want to take a closer look at energy saving measures as well. Look for the most efficient home appliances and check out your country’s energy rating labels to find out the best appliances that have a myriad ways of lowering your bills every single month. By choosing the right appliances, faucets and showers, you’ll not only save the planet, but will also cut back on your expenditures, which is good for your finances.
You can also opt for a semi off-grid or total off-grid living by using solar panels and a couple of battery banks to supplement the electrical energy for your house. Now if you’ll ask whether you’ll still have an electric bill, the short answer is yes. You will still receive an electric bill when you install solar panels; however, it won’t ask you to pay anything, especially if you’ve opted to go 100% off-grid. It will simply indicate how your usage was offset by net metering credits for the month.
Don’t forget to talk to an architect, a building contractor or a consultant before you build your house. They have the skills and experience to guide you on making the right decisions.
Process checklist of steps to building a house
1. Know your budget
First, find the house plan that matches your dream house, then look for cost estimator software to find out the approximate amount you need to spend to build your dream home. There are plenty of cost estimators available online. If you’re working with a tight budget, it would be advantageous to have a realistic budget before deciding to have an architect or a building contractor build your house.
2. Plan on how you want the floor plan to be divided
The cost to build your home is usually fairly proportional to the size of your home, as well as how complex the overall design for it is to be made. So make sure to have the architect divide the spaces of your floor plan efficiently based on how you want to use them. Purchase a floor plan or have one designed by your architect that has plenty of flexible living spaces, so that all your family needs will be addressed accordingly and no square footage is wasted.
3. Determine how you want to use and experience your floor space
Ultimately, how the architect will draw the different spaces of the floor plan of your house will be based on how you want to use it. For example, if you love to host gatherings for your family or friends, then the architect will suggest that you go for a design with an open floor plan. On the other hand, if you’re the type of person who loves to have defined spaces (e.g. home office, viewing room, living room, etc.), then you’ll want your architect to design for you a compartmentalized blueprint.
4. Pick a design that suits the location
Your home design has to be appropriate for the location where it will be built. To give you an example, a single-detached house for a family of 3 – 5 is perfect for the suburbs. What it will lack in interior space, its exterior space will make up for, and you can imagine a sizable front and back yard that comes with it. However, this house design will not work in highly urbanized areas. When you live in the middle of the city and have a very small plot of land, you have very few options when it comes to floor space, so you’ll have to expand upwards instead. While this type of house design may not include the amenities available in the suburbs, there are public parks that you can go to and unwind and relax in your leisure time.
5. Write down some household amenities that are absolutely necessary
We all love family heirlooms and there are probably a couple of you guys who are currently reading this article that have a bunch of them in your current home. This can become challenging when you move your stuff to your new home, because you might need to carefully consider the floor space and where all this furniture can be placed. A good example of this is your grandma’s red oak hardwood table, or your mom’s dresser. You’ll need to talk to your architect and discuss how the interior decoration will blend these antiques into the overall design, so it won’t look like it was just randomly thrown in there.
6. Some of your needs require modifications to your home
If you want to make sure your project is a success, consider all the possible challenges and circumstances before asking your architect to design your perfect dream home. The more things you forget, the more modifications to the floor plan will be needed later on. Some modifications you will make will be due to budget constraints, but this is also good as it will help you work within your budget and maximize floor space. Make sure to talk about all your family’s needs before the architect starts drawing anything.
For instance, you may know that it’s crucial for your new home to have 3 bedrooms.
7. Follow the blueprint down to the last detail
One of the things to do in order to save money along the way is to follow the blueprint down to the smallest detail. Of course, you have your architect or home contractor whose job it is to make sure that this is the case, but keep in mind that they’re going to follow your specifications for the house. So if you get caught up in some of the smaller details, then you might miss out on some of the larger things. Modify the floor plan as much as you desire in order to accommodate all the things you’ve considered prior to the construction of your home, not after. Making changes once construction has started is very expensive.
8. Learn to live with the fact that no home design is perfect
Even with the help of a professional architect or home contractor and with weeks of preparation, there may still be things that you wish you would have done differently, but you can be sure that you’re approximately closer to it than those who did not take the time to do a lot of early planning. For instance, you those large windows that we’ve talked about earlier? Well, while they will save you money on the electricity bill throughout the spring and summer seasons, they might be a problem when fall and winter comes. They will make your HVAC work more unless you can make a custom external protective cover for them with proper insulation.
Another issue could be noise concerns associated with an open floor plan, as noise easily travels to the adjacent rooms and might cause some nuisance to other people in the house. You may have to give up certain aspects of your dream as you can’t have it all!
9. Trust your instincts
In the end, you will have the final say as to how your house will be built, and while some designs may seem great on paper, they might not turn out to be a good idea in the end. Other ideas, though, will make a lasting impression on you. The bottom line is make sure that the house – as a whole – will work out for everyone in the family, otherwise you’ll end up with family members complaining and regretting your decisions. Sometimes your gut feeling will let you know certain ideas work, and that it is a good idea to trust your instincts, whereas an architect may be able to tell you that other ideas may not work as intended.
12 Tips on How to Save Money when Building a House
In your quest to find the cheapest way to build a house, we’ve compiled 15 useful tips on how to keep your budget down to a minimum, while avoiding sacrificing the types of features that are extremely important to you. Talk to your architect or building contractor and see if they agree with these tips.
- Buy a large piece of land and share the cost with someone else who may be looking to build a house – It’s always nice to have a large piece of real estate; however, your financial situation may not always make that possible. While this may be a perplexing problem, there is actually a way to get around it and you’ll be able to get a great building site at an affordable price. How? Well, you get someone to share the cost to pay for the lot. A close friend or a family member whose friendship you value. More importantly, someone whom you wouldn’t mind having as a neighbor.
- Get a cheap waterfront property – If you have a desire to build your house that overlooks the water while still doing so on a budget, then opt for a canal or bay lot instead of ocean or lakefront property. This option helps you save a lot and help allocate the funds to other parts of the project.
- Buy low-maintenance building materials — clay and concrete tiles, architectural asphalt shingles and galvanized steel and aluminum are good examples of this. While it’s true that their cost may be high when you initially install them, their long-term benefits will justify the initial cost, which gives you a lot of advantages in the long run.
- Use salvaged materials from demolition sites to supplement parts of your home – quality hardwood doors, used bricks and old barnwood from demolished buildings have surprising benefits. They’re cheap to acquire and some are even given away for free, but they can last long if you refurbish them. Talk to the owner first before you haul them away.
- Prioritize your expenditures — it’s okay to spend on things that you absolutely cannot live without; however, don’t neglect the important structural components of your home, or the windows and doors. The safety and security of your home is paramount and you must never sacrifice these aspects in order to save a little bit of money – it’s just not advisable.
- Keep an eye out on construction allowances and make sure that you stick to the initial budget – in some cases, you may have to spend more than what has been planned on the actual budget to build the house. This includes structural elements, decorative details and others. For example, you and the building contractor agreed to use a particular brand for the insulation because of its quality. If that’s the case, don’t settle for a different brand, especially if he didn’t inform you of the changes and cost adjustments.
- Only hire a licensed building contractor – a licensed professional building contractor is worth the money when it comes to building your new home. Not only are their skills invaluable to the construction process, but the connections they have with suppliers and subcontractors will actually help you stick to your budget with the discounts and rebates that they have previously negotiated.
- Avoid site preparation expenses if you can — you’re going to want to choose a site that has the least amount of trees, rocks and boulders (preferably none of these exists in the land at all) and one that needs less in-fill dirt and grading, so you won’t have to haul them. These things are expensive and might even cause cost overruns, and be very time-consuming.
- Say no to change orders — whether it’s the architect of the building contractor that asks this from you, always say no. Change orders will add more to your projected budget and it can also be frustrating changing things in the blueprint. Plan everything out and stick to that plan, so you’ll have no regrets later.
- Vinyl floors work too – it’s safe to say that everyone loves to have a ceramic tile or hardwood flooring; however, they’re quite expensive so you may want to use vinyl flooring in the meantime, until you can afford to install hardwood or marble flooring.
- Improve the stock plan instead of asking your architect to make a custom design – don’t worry about building a house that may not be entirely unique – you can still make the house unique from the way you choose to decorate it. If you buy an existing house plan along with the AutoCAD files, you can also use one of the types of home design software that we have listed to make various changes.
- Use your floor space wisely – you may think that building a garage with extra space for storage is good, but there are other parts of your house where you can get that space for storage. Not only that, but you can also make use of other spaces in the house for any purpose such as attic space, space under a stairwell, or spare bedroom.
Methods of New-Home Construction
Whether you’ve seen in on tv or in real life, the traditional way of building a house is called “stick framing.” This method of construction started way back in the United Kingdom before the Brits colonized America, and the tradition was brought to America by the colonists and then carried on all the way to the mid-20th century when new ways of building houses were developed. It got its name due to the fact that workers create a sort of skeleton for the house using 2 x 4 inch hardwood to form wall studs, floor and ceiling joists, and roof trusses or rafters.
It is also known by another name – platform framing – because workers start building the ground floor or first floor right on top of the foundation. Then they install the walls and once it’s complete, then they start work on framing the second floor and follow the same procedure as they did on the lower floor. The last aspect of this way of building your home’s frame is building the roof structure.
This traditional method of construction is still popular today in the United States, even with the growing number of homes being built. Today, however, various things are often made in a manufacturing plant where wall panels are built with stick framing and then shipped via trucks to the building site and assembled to build the house in a modular manner. It is sometimes referred to as “panelization” where the entire section of a wall can be constructed inside the safety of a factory, and not be exposed to the elements.
An engineer will design a plan to include the mechanical components (i.e. pipes, wires, and ducts) of the house in a CAD (computer aided drawing) software prior to the construction of the frame. Afterwards, insulation is placed between the frames and then the exterior of the home is overlaid with a weather-proof finish like brick veneer, siding, or stucco.
This method of construction has become the staple of American homes, as it has been used by the American home building industry for decades. The National Association of Home Builders (NAHB) Research Center reported that roughly 90% of all new houses built in the United States annually are made using the stick framing method. This is, in fact, common knowledge to those who work in civil engineering and building contractor as well as sub-contracting firms. In addition, you can easily buy building materials for this kind of home construction method all over the country.
True stick framing is nearly ubiquitous but its great features do not come without any drawbacks. The wall structure becomes problematic if you use moisted lumber, and they can shrink and warp once they dry, which creates cracks on your drywall. Putting in insulation also becomes a problem as the drywall cracks will let air in and force your HVAC system to work harder during the fall and winter seasons. However, the architect or building contractor should be aware of and anticipate such problems and avoid using moisted wood under any circumstances.
This method of house building is almost similar to wood stick framing, except that it uses metal bars instead of lumber. This provides a rigid frame for the entire structure which, when paired with the posts, will enhance the overall strength of the house. You also get the added benefit of a fire-proof frame, zero rust, no drywall cracks, won’t shrink or wrap, and a termite-free home.
You’ll be happy to know that there is a well-established supply chain for light-gauge steel, as it has been used in creating the interior partitions of commercial buildings for more than half-a-century. But you should also be aware that it may cost more than traditional stick framing and that prices fluctuate and vary from place to place.
One drawback of steel framing is that steel studs are a good heat conductor and this could create a problem for electrical wiring and plumbing. But again, the building contractor ought to already know about this and take necessary precautions to avoid problems with heat transfers from the metal bars.
A modular home is made or pre-fabricated in a factory. This is an efficient way of building homes in the modern times and has become more popular as shipping containers are starting to be turned into modular homes. Once a module has been completed, it is covered with protective sheathing and transported to the building site, where the building contractor assemble the various modules and have them form a hoe. It’s important to note that a modular home is different from a mobile home. A mobile home is built as a complete package with zero modules whereas a modular home is built separately with modules.
At first glance they may look the same – two halves of a simple box that will be assembled together in their building site – but they actually come in different qualities with different interior functionalities. Some are built like 5-star hotels, while others are designed with the modern minimalist intention; a few are environmentally friendly and 100% off-grid. Some are designed with architectural prowess too!
Structural Insulated Panels
A Structural Insulated Panel, or SIP, is basically a sandwich composing of two oriented strand board (OSB) between a rigid foam insulation, which creates a solid structural panel. SIPs are pre-fabricated with channels for electrical wiring, pipes and other similar inlaid materials, as well as pre-cut doors and windows. They’re often utilized as cladding for stick frame panels, or post-and-beam structure, but a building contractor can use them to create an entire house. SIPs will require less HVAC use as the insulation is already installed.
Building contractors say that the overall cost to build a house using SIPs is roughly the same as building with the use of stick framing. This is because they use less manpower to assemble the panels even though the SIP material itself cost a bit more than traditional hardwood.
Around 70% of the infrastructure in the world uses concrete, especially in commercial buildings and in earthquake prone areas. However, you will rarely see it in single-family homes in the United States. Typically, the type of concrete that appear in residential houses in the United States includes either concrete masonry units (CMUs) or insulated concrete forms (ICFs).
Types of concrete for home construction
Concrete Masonry Units: CMUs, are hollow concrete blocks stacked in interval patters from the ground up and are reinforced with steel retainers to enhance structural strength. They are covered with foam insulation board either on the inside or outside to keep the interior of the home at room temperature even in hot summer days. CMU homes are popular in the Southern United States, particularly in the State of Florida.
Autoclave Aerated Concrete (AAC) blocks: You could even consider this type of concrete as an environmentally-friendly material, because it is made from Portland cement, aluminum, fly ash (a waste product from coal power plants), and other additives. Some of these ingredients are deliberately placed into an AAC block to prevent pollution, which is a good thing. But they were also specifically selected to be mixed because their chemical reactions when mixed create microscopic air bubbles that help insulate the structure.
Insulated Concrete Forms: ICFs are made from hardened foam that is made to look like Lego blocks that building contractors assemble at the construction site, and are then reinforced with steel rods and poured wet concrete to form the house frame. ICFs are good for two things – thermal insulation and noise reduction. But when they are mixed with concrete they can withstand high winds and, in some cases, even hurricanes and tornadoes. Concrete is also good against termites!
Now that you’ve been made aware of the different construction methods for your home, it’s time to make your decision. Make sure that you hire a licensed architect or building contractor with years of experience. Depending on the method you choose, be sure to hire a contractor who has the necessary experience using that type of process. Hiring the best building contractor team to have your house assembled will be detrimental to the overall quality, energy-efficiency and durability of your home. If they do it right, then you will enjoy living in the home for many years to come, otherwise you might end up in a situation having to hire a different contractor to make costly repairs.