FIVE Big Mistakes I Made When I built My House!
- By Janet McCormick
- Published 03/4/2008
Janet McCormick
As a mother, chef, business owner and author of "10-minute meals", I have something to say. I feel like I've lived several lives though I'm a young 41-year-old. A checkered past is an understatement when describing my experiences. To say the least, I've gained some insight along the way. I crawled out of an abusive relationship with a famous song writer. I started a catering business, opened a small cafe and wrote a cookbook. ultimatebreadpudding.com 10-minutemeals.com
I had a little money saved so I started looking for a new house. When I couldn't find exactly what I wanted, I began looking for some acreage. While on the hunt I placed my own house on the market. I found 21 acres. It was really more than I wanted, but land in the area that I wanted to build my house was limited. So I decided to purchase it anyways with the thought that I could separate it later.
MISTAKE NUMBER 1. I should have separated it right then. Because I'm trying to separate it now--after my house is already built and my loan is in place. The bank is requiring an application fee and a new appraisal. That is about $800 that is non-refundable and there is no guarantee the bank will let me separate it.
MISTAKE NUMBER 2.When I purchased my property my house sold shortly thereafter. Because I had money just sitting there, I found a contractor and we purchased material and we began building our house. My thought was the sooner we start the sooner we'll move in. Though, I had a good chunk of my own money to start the building process, I still needed a construction loan for about half the cost to build. When I went to the banks for the money I wanted to borrow, none of them wanted to loan money on a house that was already under construction. It took me 4 months after I began building before I found a bank that would loan me money. Because of my circumstances I had to pay a higher interest rate. They considered this project a risk.
MISTAKE NUMBER 3.I acted as my own contractor so I sub contracted out most of the work. My father was an electrical engineer. He said he'd be glad to do my electrical work for free. O.K. don't hire your relatives. First, I gave my father money because I would never expect anything for free. But because I love and respect him so much, I couldn't ask him to move electrical boxes, light switches, or add another can light here.
He was retired and I hated seeing him work so hard. I had other things going on so now that I'm in my house, we hired an electrical guy to do the things we really wanted. They're little things like put a light switch here or hang another light here.
MISTAKE NUMBER 4. Never assume that the guy you hire is actually there to help you and would never steer you wrong. No matter how nice he is, No matter how "good 'ole boy" he appears, DON'T TRUST HIM. Unfortunately, I spent $20K more on excavating than I needed to because this dumb a-- kept telling us we had to have it or we'd be in a mess. He was clever. We were ignorant.
MISTAKE 5. BUDGET I devised a budget. Obviously, I exceeded it. You should figure about $30k more than you think when you're building your own house. When it's yours, there is no limit to what you want. Individually, these items seem inexpensive. As a whole, they mutilate a budget. Inevitably, there will be something you forget that you'll need-- Like a back concrete patio pad, or 20 loads of gravel for the driveway instead of 5 that you budgeted for. I also forgot to budget for the interest, points and closing costs. Going back to the banks for more money is not advisable. I should have asked for a more in the beginning. They don't make you take it if you don't use it. DuH! When I needed more, they made me take out a line of credit which meant more closing costs and a higher finance charge.
Pretty much, through the whole process I figured everything wrong. Basically, when you borrow money, you're at the bank's mercy. I wasn't going to go shopping for another loan in the middle of building. We were in a dumpy trailer that we situated on the property while we built the house. Miserable most of the time, I wanted out of that trailer and done with the building process. It took 7 months from start to move in date. It's been a year since then and I still need to paint some of the trim. I was burned out. Would I do it again? Well, not any time soon. But I do think I'd be better informed if I did.
MISTAKE NUMBER 1. I should have separated it right then. Because I'm trying to separate it now--after my house is already built and my loan is in place. The bank is requiring an application fee and a new appraisal. That is about $800 that is non-refundable and there is no guarantee the bank will let me separate it.
MISTAKE NUMBER 2.When I purchased my property my house sold shortly thereafter. Because I had money just sitting there, I found a contractor and we purchased material and we began building our house. My thought was the sooner we start the sooner we'll move in. Though, I had a good chunk of my own money to start the building process, I still needed a construction loan for about half the cost to build. When I went to the banks for the money I wanted to borrow, none of them wanted to loan money on a house that was already under construction. It took me 4 months after I began building before I found a bank that would loan me money. Because of my circumstances I had to pay a higher interest rate. They considered this project a risk.
MISTAKE NUMBER 3.I acted as my own contractor so I sub contracted out most of the work. My father was an electrical engineer. He said he'd be glad to do my electrical work for free. O.K. don't hire your relatives. First, I gave my father money because I would never expect anything for free. But because I love and respect him so much, I couldn't ask him to move electrical boxes, light switches, or add another can light here.
MISTAKE NUMBER 4. Never assume that the guy you hire is actually there to help you and would never steer you wrong. No matter how nice he is, No matter how "good 'ole boy" he appears, DON'T TRUST HIM. Unfortunately, I spent $20K more on excavating than I needed to because this dumb a-- kept telling us we had to have it or we'd be in a mess. He was clever. We were ignorant.
MISTAKE 5. BUDGET I devised a budget. Obviously, I exceeded it. You should figure about $30k more than you think when you're building your own house. When it's yours, there is no limit to what you want. Individually, these items seem inexpensive. As a whole, they mutilate a budget. Inevitably, there will be something you forget that you'll need-- Like a back concrete patio pad, or 20 loads of gravel for the driveway instead of 5 that you budgeted for. I also forgot to budget for the interest, points and closing costs. Going back to the banks for more money is not advisable. I should have asked for a more in the beginning. They don't make you take it if you don't use it. DuH! When I needed more, they made me take out a line of credit which meant more closing costs and a higher finance charge.
Pretty much, through the whole process I figured everything wrong. Basically, when you borrow money, you're at the bank's mercy. I wasn't going to go shopping for another loan in the middle of building. We were in a dumpy trailer that we situated on the property while we built the house. Miserable most of the time, I wanted out of that trailer and done with the building process. It took 7 months from start to move in date. It's been a year since then and I still need to paint some of the trim. I was burned out. Would I do it again? Well, not any time soon. But I do think I'd be better informed if I did.
