Saving money is usually a high priority in today’s market. Here are some tips showing you how to save money when building a house. Remember though that while you may be temped to cut corners in quality, there are a few ideas which seem to save money but over time could prove to be expensive mistakes. We will be looking at those too, because true savings means long term savings, for years to come.
How to save Money when Building a House Tip 1: Make sure your home is well built and well insulated, using the proper materials. There are plenty of other ways to save money. Never ever sacrifice the soundness of the structure, or the insulation. Insulation pays for itself over time, and without good structure, your mortgage could outlive your home.
How to save Money when Building a House Tip 2: Salvaged building materials, especially moldings, doors and woodwork can save you a bundle plus give you better quality. Older homes and office buildings often have beautiful antique woodwork. It’s also good for the environment to use pre-existing materials rather than make new ones. Discuss salvaged materials from demolitions with your contractor or home builder.
How to save Money when Building a House Tip 3: Salvaged flooring materials and floor covering can also be a great way to save and occasionally get better quality as well. Likewise used furniture can be a lifesaver when you’ve spent your budget on the house already.
How to save Money when Building a House Tip 4: Use insulated concrete panels. They are cheaper, assemble more quickly and are more energy efficient than traditional stick built walls.
How to save Money when Building a House Tip 5: Build a smaller home. It obviously saves on cost per square foot, and saves on the heating bill for years to come.
How to save Money when Building a House Tip 6: Build small with the intentions of adding on later. Design your house, and place it on the lot in such a way that it can be added to easily.
How to save Money when Building a House Tip 7: Install solar panels from the beginning. By keeping the house energy efficient and installing solar panels you could go off the grid or even sell electricity back to the electric company, plus there are government programs which will help you pay for the solar panels.
How to save Money when Building a House Tip 8: Buy energy efficient appliances. They may cost a little more initially but in the long run, the savings will make a huge difference in the efficient use of energy. Apply the energy savings to your house payments to pay them off more quickly.
1. If possible, be prepared to make a substantial down payment on your home.
2. Opt for a 15 year mortgage over a 30 year mortgage. The interest rates are better, and the monthly payment isn’t all that much more. You will save 60% or more on interest over the course of the loan.
3. Applying for an FHA loan or other government sponsored loan can get you an even lower interest rate.
4. Opt to lock in your low interest rate as soon as possible. Some banks will allow you to lock in the rate for the mortgage loan, when you get your home building loan. This is your best option in today’s economy. Interest rates are at rock bottom currently, and can only go up.
5. Similarly, get a fixed rate on your mortgage, and do not go with a variable rate. Variable rates are always a gamble, and with rates so low, it’s much more likely they will be higher 15 or 30 years in the future.
Never sacrifice on the Foundation or Structure
There are many ways to save on home building. Since the interest is your largest expense, it’s logical to start there with savings. Building small with an eye towards the efficient use of space also saves money without sacrificing quality. Don’t go with any idea that compromises structure quality, such as building on a slab rather than a foundation. There is more termite risk on a slab, and there’s more of a flood risk. Plumbing leaks or sagging pipes as the ground settles can cause catastrophic problems if they are under a concrete slab, and then there is a possibility the slab could crack as well. Builders sometimes suggest building on a slab to save money, and sometimes it goes well, but it can go horribly wrong, so we don’t recommend it. See our 98 page booklet for more information.
Build your house on a good foundation with top quality materials and plenty of insulation. Save money in other ways, but not on the structure. The best way to answer the question, “How to save money when building a house?” is to spend on what is lasting and important, remember energy efficiency, and save on things which are less crucial and can be upgraded later.