Dream House


Though many of us struggle underneath the burden of college debt or in the 9-to-5 of a dead-end job, the dream of homeownership isn’t dead (even with affordable housing scarcer than ever in nearly every major American city). Surprisingly, building a house from scratch within your means seems to be more achievable than ever. If you’re willing to step out of your comfort zone, it may be time to consider taking on the ultimate DIY project — and the benefits will leave you floored.

Types Of Construction Loans

The national average cost of building a new home is $286,546 according to HomeAdvisor. If you have decided new construction is the best option for you, there are a few types of loans available to help make your dream into a reality.

The first loan is known as “construction to permanent.”

You borrow to pay for construction, and after move-in day your lender converts the loan balance into a mortgage. This option is recommended if you don’t expect any surprises while you build and want to lock in interest rates — and reduce fees.

But maybe this isn’t ideal for your situation…

Alternative Construction Loans

The second loan type is known as “stand-alone” or “construction only.”

What you need to know is that this is actually two loans, the first of which pays for construction and must be paid off when the building is complete. After you move in, you get a mortgage from your lender to absorb the construction debt. This is a better option for taking your time to choose a permanent lender for your mortgage.

You might already be sitting on a place that needs a renovation — and there’s a construction loan for that, too. The cost of a renovation loan is added to your mortgage and based on the value of your home after the upgrades. But if a mortgage isn’t your style, there’s a new trend getting frugal buyers-to-be very excited…

Go Big Or Go Home?

A construction loan can include the cost to purchase land, permits, labor, materials and even establish a contingency, but you should know that qualifying for a construction loan can be hard. And for some people, loans are unreasonable or too risky.

In response, a growing movement has taken hold of communities fed up with the rising cost of living, and they’ve banded together to challenge zoning laws and live in self-designed tiny houses, which can usually be towed behind a vehicle.

They’re a win for low environmental impact and freedom of movement, and much more…

The Tiny House

An alternative to traditional housing perhaps best suited for single people or even small families, the tiny house has become popularized on TV and in social media for their eccentric styles, smart space-saving designs, and major value.

Though its greatest strength is versatility, the average cost to build a basic tiny house yourself is only around $23,000 according to experts at tinylife.com. The tiny house is entirely customizable and can truly reflect a person’s taste, budget, and needs.

Not factored in the build cost: where to put it. That could set you back, depending if you need to rent out space — acreage with or without utilities available, like electricity or plumbing.

Thinking of something on more solid ground? Don’t fret…

Your Home Is Out There

No matter how uncertain you might feel about building your very own home, if you have the will, there is a way. Home is what we make of it, and there is ample support is out there for realizing exactly what you need to make it a reality. Look for advocates in your community or special loan financing options for developing on incentivized parcels — you could be ready to turn the corner on a place of your own sooner than you’d ever think.