Steps To Building Your Dream Home

If you have the funds for your project move on to step 2. If you will be obtaining a loan to build your project, it is important that we determine your maximum construction budget.

To do this you need to consider two key factors:

• The maximum loan amount you qualify for.
• The largest monthly payment you are comfortable with.

For a lender to determine the maximum loan amount you qualify for, they consider three factors: credit score, income and debt. Credit scores are referred to as your FICO Score. FICO Scores range between 300 and 850. Higher is better. Your FICO score is determined by your payment history, amount owed, length of credit history, new credit, and types of credit used. Generally speaking, lenders want your credit score to be 660 or higher to be considered for a loan. Lending requirements vary among lenders. The Federal Government has a free publication, "Your Credit Score". In it you will learn why your credit score matters, what are good and bad scores, the elements of your FICO credit score, and how to raise your score. With regard to income and debt, most lenders require your total monthly debt (including your house payment) to not exceed 38-42% of your gross (pre-tax) monthly income. This percentage can vary depending upon your FICO score and amount of your equity in the project. Do not let this process be overwhelming, speak with us at Premier Home Kits and we can assist you. We can refer you to an experienced lender for your project. Keep in mind, to build a new home actually requires two loans, the construction loan and the long term loan (or conventional mortgage) that replaces the construction loan after the construction is completed. In many ways, the construction loan is the most important since it must be structured in such a way to conveniently pay the construction bills as your home progresses. Hence, the importance of using an experienced "new construction" lender that will also "bundle" the construction and long term loans. It is also important to consider the maximum loan payment you will be comfortable making. There are many factors regarding your lifestyle to consider in this decision. Many are happy with whatever amount their lender decides to loan them. While others have a specific amount in mind, to leave money left in their budget each month for other priorities, such as savings, retirement, travel or other family expenses.

The value of your completed project is another important aspect the lender will considered. In general, the lender will loan about 80% of the appraised value of the completed project, including the land costs. For construction lending purposes, the Appraiser uses the building plans to arrive at the anticipated value. As you can imagine, one could have spent thousands of dollars to get to this point and it would be nice to have an idea of the anticipated value before spending any money. We suggest one consult either a Real Estate Agent or "www.zillow.com” to determine anticipated value before spending any money. This is not the same as an appraisal, but it's useful in evaluating the overall project.

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You may already have the land you plan to use for your project, and if so you have probably already researched the following and are ready to move on to choosing your plan that is suitable for your land.

But, if you have yet to find that perfect location, here are some important considerations before you buy:

State, County and City Building Fees.

• Distance from your work, schools and social activities.
• Slope of land, if any (construction costs on sloping land are higher).
• Any Covenants, Conditions and Restrictions (CC&R's) that apply to the property. Many CC&R's have home size and style requirements along with home owner association dues. Some also have use restrictions.
• Utility costs including public connection fees or cost estimates to install a private water well and/or septic system.
• Build ability of the lot. Some lots have additional requirements to build on because of environmental issues, grading requirements, soil bearing requirements, and long driveways or other access problems.

If you already own your lot, Premier Home Kits can help you resolve the cost issues related to the above considerations. If you are working with a local Realtor to find your new home building site, make sure that you make any offers to purchase the property, 'Subject to', the above considerations for at least 30 days. This gives you the opportunity to evaluate the development costs before you actually purchase the property. Again, Premier Home Kits can help you with the construction cost items by giving you a Construction Cost Estimate using a proprietary PMHI estimating program.

Weather you have a picture in your head or need us to help you visualize, Premier Home Kits will assist you in choosing which home plan is best for you and your project. PMHI Pre-Engineered or PMHI Custom plans? You can choose from one of our 36 existing pre-engineered plans that meet or exceed current building codes. We can also modify one of our existing plans to meet your specific needs. Premier Home Kits can also produce a uniquely custom plan just for you or work with your existing plans. While you are deciding which plan best meets your needs, be sure to consult with Premier Home Kits about the construction costs associated with the different design features you would like in your new home. Some features, like higher roof pitches or casement windows, can increase your building costs. You might prefer to use that money in other areas of your building project. It is important for you to choose a home plan that best fits your building site, family's needs as well as your budget.

Another consideration when choosing a plan is its appraised value when completed. Generally speaking, it is wise to build a home that is similar in size and quality to the other homes in the immediate neighborhood. If the home you're building is a lot larger or smaller than surrounding homes it could have an adverse effect on your appraised value. The value of the other homes in the area is used to help calculate the appraised value of your home. For more information about appraisals you can contact Premier Home Kits, a local appraiser or www.zillow.com.

Something to consider in your planning. Will you 'Aging-in-Place' in this home? 'Aging-in-Place' is one of the terms used to describe one's desire to live in their home into their golden years. In order for this to happen, the home should be designed to transition with you through all of life's stages. To help make this happen PMHI has developed a home design approach we call the Transitional Home Environment (T.H.E.)T.H.E.Certified Home Plans are uniquely created to incorporate flexible Life-Style options, Home Automation Features and Accessible Design. T.H.E. Certified Home Plans provide a home environment that beautifully transitions through all stages of life. T.H.E. Certified Home Plans provide peace-of-mind for the future. If you would like to learn more about the Transitional Home Environment, contact Premier Home Kits.

Most people know what role they want to take in the building process. Determining this role has a direct relationship with the construction budget. You can take on the majority of the process by acting as your own General Contractor. You are the boss and we refer to this as 'Owner/Builder'. Acting as your own General Contractor, you can do as much of the work as you desire, while also choosing your own subcontractors for work you do not wish or know how to do. Your other option is to hire a General Contractor to manage the project for you. You still make all the final decisions regarding design and style, the General Contractor will take care of the subcontractors, scheduling and oversee the work.

The most economical way to build a new home is to do all the work yourself. You may have heard this referred to as “sweat equity”. Even if you can’t do it all, if you decide to act as an Owner/Builder, simply managing the project by hiring all the necessary subcontractors you can still realize savings of approximately 20% or more. However, most people do not have the time, desire or all the required skills to be their own General Contractor. If you just want it to get done, Premier Home Kits can help you find a General Contractor to manage the job for you.

When your home plans are completed, you will be ready to generate your construction budget and obtain labor and material quotes for those items that you do not plan to do yourself. The format for your construction budget (called the Job Cost Breakdown) will be given to you by the lender. The lender will also give you the necessary paperwork to complete for the Appraisal request. All this information can be intimidating, but Premier home kits can assist you with the process. We have contractors referrals and material suppliers who can give you the labor and material costs for their part of the Job Cost Breakdown. For the portion of your project that will be supplied by PMHI (the shell or framing package), you will receive a written quote and specification based on your home plans and engineering. Premier Home Kits will also help you in properly completing the Job Cost Breakdown so you will be ready to submit it to the lender for approval.

So know you have a plan, know the costs and are ready to make your dream a reality. The last step to be completed before you actual start your build is to submit your completed plans to the building department to receive your permits.  The permit process can vary from one day to months, depending upon the state, county or city in which you are building. On average, most building departments take about six to eight weeks to complete their process. A major advantage of using a plan designed and engineered by PMHI is that we guarantee that the plans and engineering will pass all of your local building department's requirements (except site specific issues such as your site plan, energy calculations, etc.).

To make this process go as smoothly as possible, you should do a little pre-work ahead of time. Obtain a list of required documents needed in order to get a permit, either online or from your local building department. If you follow the list, it will make the permit process much easier to work through and possibly go a little faster. Premier Home Kits will be happy to help you get the needed documents together.

After you have received your building permit you can get started building your new home. Depending upon the complexity of your project, the building of your new home can take anywhere from 3 - 12 months on average. If you are an Owner/Builder, you're the boss. You are acting as the General Contractor. As such, you are responsible for the success of your project. Owner/Builders hire licensed contractors to do whatever work they have chosen not to do themselves. Most Owner/Builders choose to work with contractors referrals from Premier Home Kits. However, Owner/Builders are not required to work exclusively with contractors from the Premier Home Kits referral list if they have someone else they would prefer to use. During the building process is when Owner/Builders find the help of Premier Home Kits most valuable, as we are always available to help with questions along the way. During the construction phases you should take pictures showing the progress of the building project. This is done for two reasons. First, it is a way to remember the details of the construction process and to show your family and friends. Second, you have a record of where the utilities are located in the structure. This can be especially helpful if you want to make sure not to put a nail into any plumbing, gas lines or electrical cables behind the sheet rock when hanging a picture on the wall.

Move-in day is the day to celebrate what you have achieved. It's the time you get to realize your dreams of living in your new home! A home that YOU created! Depending upon the amount of work you actually did as an Owner/Builder, you may have 20% to 40% equity in your new home the day you move in. (Amount of actual equity varies from project to project and cannot be guaranteed.)

After moving in it is a good time to organize and save your plans and all construction documents for possible future reference. Make sure you also save a complete list of your subcontractors and their contact information. Organize and save all warranty information for the materials used in your new home, including all new appliances. Keeping some samples of items such as tile or flooring may also be a good idea. The pictures you took during the construction phase should also be organized and saved with these documents. Bottom line, it is much easier to organize this information when it's fresh in your mind rather than once it is packed away.

In conclusion, building your dream home is one of the most rewarding experiences you can ever have. With over 40 years of experience helping others build their new homes, all of us at PMHI and Premier Home Kits know we can help you succeed, as well. Contact us and let Premier Home Kits help you get started.