Building a Custom CT Home? Begin With a Budget

Posted by Bob Wiedenmann

Chances are you already have at least a rough idea of what you want to spend on your new home. But knowing what you want to spend and knowing how you should spend it are two very different things. There are all kinds of calculators available to you to help you figure out what you can really afford. But there aren’t a lot of resources that help you figure out where it makes sense to spend your money on a new home.

While there are no hard-and-fast rules about where you should put your money with building a house in CT (every home is different and every homeowner has his or her own areas of importance), there are some general rules of thumb about where it makes sense to spend your money when building a new home. Now, what do you spend your money on? Here are a few of the best ideas.

Connecticut Bathroom Remodeling Guide

Room Size:

It’s pretty easy to think that you’ll never outgrow the space you have. When you first move into a home, you may think that it feels so spacious. But over time, we all collect “stuff,” and it’s easy to outgrow the space we’re in. If your family is still growing, what seems like adequate space can quickly feel crowded. In all our years of building, we’ve never heard anyone complain that they had too much room! And here’s another factor to consider: It will never be as inexpensive to add space as when you are building your home. If you decide to add space later, it’s simply going to cost you more. That doesn’t mean you need a McMansion, but don’t skimp on your room size. 

Your Kitchen:

This is probably no big surprise. Kitchens are the heart of the home and are where a lot of family activities take place. Increasingly they are also where a lot of entertaining happens. And on top of that, they are hard-working meal preparation spaces. Kitchens still rank as one of the top remodeling projects for homes—because they are so important and because people often underestimate the space and features that they will need. You can spend money here now—or spend more later to get what you really want. 


This doesn’t sound very sexy, but it’s so important. You may think you’ll never fill your closets or storage areas when you first see them, but it’s one of the biggest frustrations homeowners face: where to put things that aren’t currently in use. And the good news is that you may not have to add square footage. A good builder can often “find” hidden space that can be turned into storage space. 

home built on a lot

Your Lot:

Many homeowners get so fixated on the house itself that they don’t pay adequate attention to the property that the home is on. Your location, however, is much more than just your address or your views. You’ll want to consider convenience to the things that are important to you and the neighborhood where your home will be. 

Setting Your Budget

One of the first things you have to do is to figure out a realistic budget for the home you plan to build. That may not sound like nearly as much fun, but it’s absolutely essential. You’ll notice that I’ve emphasized realistic when talking about calculating your budget. That’s because your budget should really dictate what kind of house you can build. It doesn’t matter how many $750,000 homes you look at, if your budget is in the $500, 000 to $600,000 range, that’s where you need to look.

Prequalify for Your Loan

One of the best ways to budget is to prequalify for your loan. Find out what you can really afford to buy. That doesn’t mean you have to take out a loan for the maximum amount—but it does tell you a realistic range. It’s also good to leave yourself a little bit of “wiggle room.” If you qualify for a $600,000 home, you’ll want to allow a little bit of buffer in case you need to make some changes or want to include some upgrades.

Financial Parameters

It’s great to do research on floor plans and options for your new home. But it’s really smart to start with knowing your financial parameters before you get too far into the planning process.

A good builder will come up with a good plan that meets your budget. If you change the plan in the middle of the project, the builder has to create a new plan. That can delay the project significantly and it can end up costing you (and your builder) more money.  Nobody will be happy with that.

You shouldn’t spend more than you can afford. But if you trust your builder, you should give him your real budget at the start of the process and let him come up with a plan that will give you the most for your money. And if you don’t trust your builder with your budget, do you really want him building for you?

Building a Quality Home

Your goal shouldn’t be to build a home as cheaply as you can but to build the best quality home possible within the limits of your budget. Your goal isn’t to save money—it’s to maximize value. There’s a subtle difference.

When you meet with your builder, ask him how you can get the most value without cutting corners. Your goal is not to build a $500,000 home for $400,000. What you really want is to have a comfortable home that you can enjoy for years to come.

So before you start drawing up your plans, remind yourself why you’re building your house in the first place. That will make things a lot easier when you sit down with your builder to talk about how to get the best house for the money.

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Once you get your budgeting figured out, you should really think about is financing because until your financing is in order, nothing really moves forward. Let's take a look at financing a home in Middletown, Connecticut.

large colonial home

Financing Your Home

Be Prepared for Fluctuation in Rates

We’ve enjoyed a fairly lengthy period of low mortgage interest rates across the country. And while rates have edged up slightly, interest rates are still very affordable. Most experts project that interest rates will go up at some point. There doesn’t seem to a consensus about when that will happen or how much those rates will increase. There is an agreement that rates won’t head back down (they’re already quite low).

Keep in mind that rates aren't the only thing you should be looking at. Sometimes a loan will have a lower rate but have hidden costs in the form of points or closing fees that essentially eliminate the benefit of a lower rate. Take your time and review all the costs before accepting a loan.


Compare Apples to Apples

Mortgage rates can change daily. You can drive yourself to distraction trying to keep track of minor shifts in the rates. You'll be better off if you can get all of your information and paperwork completed and compare several loans at the same time. That can help eliminate some of the fluctuations that occur in the market on a daily basis.

Choose a Home Loan That Fits Your Needs

While a 30-year, fixed-rate mortgage has been the standard for home loans for years; it may or may not be the right choice for you. Talk to reputable lenders about the options. For instance, if you have a significant amount (i.e. 20 percent) that you can use for your down payment, you can avoid the expense of mortgage insurance. Or, if you can afford higher monthly payments, you might opt for a 15-year loan. You’ll save a considerable amount over the course of the loan. There are additional mortgage plans (such as 5/1, 7/1, or 10/1 adjustable-rate mortgage) that may make sense—especially if you don’t plan to stay in your home for a long time. The same floor plan doesn’t fit every family. The same is true with mortgage plans.

Be Prepared for Some Paperwork

Some of the questionable lending practices of several years ago led to increased scrutiny in the mortgage industry. That translates to increased documentation. It’s a fact of life, but don’t let a little additional paperwork deter you. By getting all of your financial information together and pre-qualifying, you can take care of the best possible rates quickly when it's time to get your loan.


Get Pre-Qualified

I mentioned this above, but it bears repeating. Pre-qualifying not only allows you to jump on the best mortgage rates, but it also expedites the purchasing process. When you find the perfect community and the perfect plan for your home, you’ll want to move forward. You won’t want to wait for your financing to come through—and possibly miss out on the opportunity to get the dream home you’ve always wanted in the best possible location. For instance, our Magnolia Ridge community is a great location in the Westfield section of Middletown. Feel free to contact us if you would like help with any step in the home building journey.


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Tags: Finance & Budgeting, Building a Custom Home


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