To buy a house on loan, you need to have a compulsory 20% downpayment required by the bank. The bank does this to ensure that you have the ability to begin construction. With this, you will qualify for a loan.
If you feel you do not need a loan, you will have to calculate all the costs entailed in building a house to approximate the amount of money you will need. Conduct thorough research on the prices of the requirements of building houses. When researching, consider future economic changes that may affect the price of construction.
Requirements For Building A House
To know how much you should save to build a house, add the sum of prices of the following requirements of construction. The prices will vary depending on the size, design, and location of your house.
- Legal requirement fees.
- Cost of hiring labor.
- Cost of building materials.
- Cost of installing electricity.
When saving to build a house, remember to set aside some funds for emergency purposes. A lot of unforeseen problems may occur in the midst of construction. To counter this, you will need extra funds that will not dig into the money you budgeted for building or your personal finances.
Considering all the above, you should save at least $150k before you begin building.
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