Category Archives: Pittsburgh Custom Home Builders

What is a Custom Home?

What is a custom home? Paragon Pittsburgh BuildersCustom Does Not Always Mean “Custom”

Does it seem like everyone has artisan bread these days? Or artisan something. If you are looking to build your own home, you might find that the term “custom home” has become the artisan bread of the construction world – it is used very broadly and could mean any number of things.

Generally, there are three different types of new home building.

Production Homes

Also called tract houses, this type of development offers the least amount of choice for homebuyers. That doesn’t have to be a bad thing if you are easily overwhelmed. These builders may let you make minor changes to a set list of floor plans, but your house will end up looking very similar to others in the neighborhood.

Semi-Custom Homes

These homes also begin with a basic floor plan from the builder, and these builders allow you more flexibility to add a room or change a little bit. Buyers in these neighborhoods often appreciate the added choices they get, but these homes fall short of providing the truly unique neighborhood many buyers are looking for.

Custom Homes

A true custom home is all about choice, from the ground up.  A custom builder may show you some floorplans to get the creative juices flowing, but always lets you make as many changes as you like or start fresh with their architect and a clean sheet of paper. Many buyers choose a popular design and fully customize certain areas of the home but not others.  Either way, the Paragon process is designed to make buying a new home as easy and enjoyable as possible so that you can get the new home that has every little feature and detail that you dreamed about.  Working with a custom Pittsburgh home builder also gives you the opportunity to incorporate Energy Efficient or Green Building techniques, create accessible design elements or custom spaces to suit your religion, family size or even your favorite hobby, and with a good builder, design all of that in a way that is flexible so you home can adapt to your family’s needs in the future just as it does now.

How to Finance a New Home Build

Borrowing Basics for Homebuilders

how to finance a custom homeFinancing a new home build is a bit different than taking out a mortgage on an existing home. The process doesn’t have to be difficult – we’ve outlined the borrowing basics of a new home build so you can get started on the fun part: building your dream home!

Cash is king of the land

Typically, lenders are cautious of lending money for the purchase of raw land. This is because if the borrower defaults, the land can be difficult for the lender to resell. As a result, some banks may request a large down payment with a high-interest rate. Land purchase lenders may be difficult to find, but fortunately we have some great ones in Pittsburgh that have made new homes a specialty. They understand the challenges and can often roll everything into one loan for customers to help eliminate this problem.

Putting the bucks behind the blueprint

Simply put, there are two major ways to finance a new home. The construction loan and the end loan. The end loan is more similar to a regular mortgage, where the buyer signs a contract to purchase the home when it’s complete. These types of loans are great for home buyers who don’t have a lot of money to put down or want to buy an already completed new home, the downside is that end loans are generally a lot more expensive than construction loans.

In a construction loan, the bank will set aside a pool of money equal to the total value of the mortgage and disperse money to your builder little by little as the home is complete. Many people will tell you that this means you have to pay your mortgage before you even get to live in the house, but this is somewhat misleading. New home buyers are responsible for interest during the time the home is being constructed, but only on the portion of the loan distributed to date so in general, the payment in a very small percentage of the future mortgage payment for most of the construction period. Essentially, it comes down to affordability. If a new home buyer has the cash to do a new construction loan they will end up paying a lot less in the long run, just like buyers who make larger down payments end up paying much less overall.

Eliminating risk – tips from the pros

As you can see, putting up the money to build a new home differs from taking out a conventional mortgage. Here are some helpful tips to help save your time, money and sanity:

  • Shop around. Look for lenders that offer combination financing, which may roll together all or at least part of the deal, minimizing costs and paperwork. Every lender is different in their approach, so shop around. If your builder forces you to use their lender in order to get the special pricing, odds are you are not only overpaying for any “freebies” elsewhere in the home, but paying way too much for your loan as well.
  • Budget wisely. The loan amount will be based on a budget you provide and the appraised value of your new home. It’s important to carefully consider and detail all costs of the project, including plan and permit fees, construction costs and loan fees. Many on your lot builders don’t include the full cost of things like utility lines, soil conditions or sewage. Make sure you know ahead of time who is responsible to pay for which items and compare apples to apples. If costs exceed the original budget – your wallet makes up the difference.
  • Be aware of changes in rates and construction costs. This is something we hear all the time, a buyer shops for a home, and decides to save up a little more money in order to put more money down or pay for a larger home. Unfortunately, when they come back the next year, the cost of lumber, concrete or other materials goes up regularly may have risen and eaten up what they saved. Ask your builder and lender if they can be flexible, there is a good chance you can start now when prices are low and if your builder lays things out right, you can add that sunroom or extra garage bay in a year or two.
  • Use these increases to your advantage. Most people know that the future value of your home will be determined by the value of your neighbor’s homes and how well your homes holds up to the bumps and bruises of everyday life. Given that construction material costs are constantly rising, the first half of the new home buyers on a particular street stand to gain much more appreciation than those who wait. It’s likely that the last person to build will end up paying 10% more or higher than if they were the first person who built and when a new buyer comes looking in 10 years, it’s the buyer who acted fast who reaps the extra money.
  • Make sure your home will stand the test of time. Ask a buyer who built with the same builder 5 or 10 years ago how their house is holding up, the internet is full of people who will tell you their experiences. Have they had to put a lot of money into upkeep or did the materials their builder used originally spare them this expense. The same thing is true of new homes that is true of many other products. The item that seems cheaper now might end up costing you more later, and that money can’t be rolled into a mortgage.

Steps to New Home Construction

Steps to New Home ConstructionBuilding Your Dream Home?

Prepare for your new home build with these 6 steps

Building a new home can be exciting, exhilarating, overwhelming, and at times, unpredictable. You’ll need vision, focus and planning as well as a hefty dose of fortitude.

Thinking about building a house and need some tips to get started? Let’s go over some of the steps to help give you a general understanding of the process. Talk to your builder when it’s time to discuss specific processes for your custom build. Most of these steps can be handled by your builder, allowing you to focus on other aspects of your dream home. Be sure to choose your builder wisely.

Step 1 – Determine your budget

How much house can you afford? Financial and lender websites offer online calculators that do the math around monthly income versus expense and debt. But what is your personal preference? For personal, investment or lifestyle reasons – some opt to live beneath their means instead of within their means. No matter how you work the margins, discuss loan options and qualifying requirements with a custom home builder that will allow you to choose from multiple lenders.

Step 2 – Find a location and pick your lot

Location is so important! Not only does it determine property values, your family will most appreciate a home site that is close to work, favorite amenities, and the most desired school districts. You will also want to investigate zoning issues to uncover any proposed developments or upcoming projects in the area, as well as determine any restrictions you may face during the construction phase.

Step 3 – Enlist a team

Constructing a home takes a team of professionals. The ‘who’s who’ in home construction will likely include a developer (land), architect (plan), builder (construct), design consultant (stylize), construction manager (project manage), contractor (install), and inspector (approve). Select professionals that understand your goals and have a portfolio of work that complements your own needs and wants. Research custom home builders in your area, there are many that serve as a one point of contact that will help you through the process, often working with a list of architects and other professionals local to your area.

Step 4 – Decide on a blueprint

Start from scratch and sit down with an architect, purchase a pre-drawn plan from a reputable design firm, or opt for something in between the two and modify an existing plan to better suit your unique and specific needs. Consider your must-haves and don’t wants in advance, and make a list. The more you plan, the smoother the process will be once you break ground.

Step 5 – Stay sane through the build process

Building a new home is an involved process that can take 6 months to a year – sometimes longer, depending on the home size, design complexity, and even weather conditions. Having choices leads to the custom home that you love, but sometimes the decisions can feel overwhelming. Choose a custom home builder that can help you through the process every step of the way and help alleviate some of the stress.

Step 6 – Enjoy your new home!

Congratulations! Starting with an idea and the turn of a shovel, you created a home of your dreams. The new home build endeavor gave you stories to tell before you even moved in. You already have a special sentimental connection to this space. Settle in, enjoy and continue to make memories in only the way you can.