Architectural Designs

Is this a good time to build a house?

After all the money and the land payoff, I will end up with a loan of 250K, this will increase my mortgage to around $1700 per month. http://www.eplans.com/chateauesque_house-plans/HWEPL09142.hwx Is this a good time to build? I'm starting to get cold feet - is this normal?

Public Comments

1. If you can afford the mortgage it is a very good time. Prices are nearly at rock bottom and the economic indicators are positive. If you cannot afford the mortgage it is never a good time to buy.
2. It goes back to the basics. Can you afford the payments? How stable is your job? Do you have a cushion to make the payments for 6 months in case you lose your job? If there are yeses to all these questions you should be fine.
3. It is NOT a good time to build new, which is why there is so little of it happening right now. In fact, most new construction does not appraise these days because existing housing is cheaper. When your appraisal comes in low, the bank will tell you to put more money down if you want to proceed, and you could wind up losing any money you already put down. Ask your lender what percentage of NEW homes are appraising at purchase price, and I'll bet it will be low.
4. No, it's good time to rent.
5. The cost of existing homes has gone down in a lot of areas but the cost of construction has not-much. Land may be cheaper but the materials and skilled labor is pretty much the same. Buying an existing home is a better deal. The interest rates for mortgages are lower than you will likely ever see again in your life. If you are going to build a new house either this year or next year or two years from now-and not going to buy an existing home at all then I would build now. The cost of building a new home is not likely to go down and the interest rates could easily be higher. ********* Oh! It is a very normal thing for people makeing any kind of a big desicion to worry. In business school they call this "post purchase cognitive dissonance".
6. The way prices have fallen and keep falling by the time your home is done it could be worth less than when you started. You can usually get more for the money if you buy a home that is built at this time. Labor cost may be down but building supplies not so much. When prices go up your MAY rise quicker than a existing home if it is older and in not so good shape. If they is a lack of quality homes in your area you could possible see a financial benefit when the market recovers. I there are plenty of new good homes in the area I don't think it would be a good move financially.