Should You Build or Buy a Home?

  • Posted on: 11/23/2020
Should You Build or Buy a Home?

When making the important decision to become a homeowner, there are several options available for the type of home you can purchase: buying an existing property or building your own home.

Before you begin, weigh the pros and cons of each to help you determine the right option to fit your lifestyle.

Pros:

Buying a home:

  • Less expensive than building
  • Move-in ready
  • More options available in your desired location
  • Can negotiate on the price

Building a home:

  • Personalize the home
  • Little to no competition, especially if you already own land
  • Less chance of repairs and maintenance
  • Everything is brand new

Cons:

Buying a home:

  • May require more repairs and maintenance
  • More competition
  • Potential for higher energy costs
  • Compromising on a home that doesn’t fit your needs

Building a home:

  • More expensive than buying
  • Takes longer to build
  • Involves many decisions
  • Can be stressful

If you would like the best of both worlds, there is also the option to purchase and renovate a fixer-upper. These types of homes do come with pros and cons as well:

Pros:

  • Lower purchase price
  • Little to no competition
  • Personalize the home

Cons:

  • Takes longer to renovate, but not as long as it would be to build
  • Hidden costs
  • Unexpected issues may arise
  • May need to live in the home while under construction

No matter which option you choose, be sure to budget and confirm you can afford the home. It is wise not to purchase a home with a monthly payment that is more than 25 percent of your take-home pay. This includes the principal, interest, property taxes, homeowners insurance, homeowners association (HOA) fees, and private mortgage insurance (known as PMI; if the down payment is less than 20 percent).

5 Questions to Ask Yourself First:

1. Do I need to move in now, or can I wait?

2. Am I available to work with several people and make decisions often? Will I enjoy choosing every detail of the home, or would that overwhelm me?

3. Do I prefer that everything is new, or does it matter?

4. Am I willing to compromise on some items, or do I need everything checked off my wish list?

5. How much home can I afford?

To select the option that works best for you and your family, reach out to a HOMESTAR Mortgage Loan Originator today!