cost to build a home?

So, DH really has this idea that buying a "cheap" piece of land to hold on to and then build a house from scratch. In theory it sounds like a good idea, but I think it is going to be super $$$ to build the house. Someone said it's around $200/sq ft for new construction, without upgrades.

Can anyone who's looked into this give me insight? Thanks! :)

Re: cost to build a home?

It is a great "idea" however you cannot do a conventional loan on a piece of land. You have to do a lot loan which requires at least 30% down depending on the bank. From there you take out a construction loan which does not have a fixed rate usually and then at the end you close on the entire cost. The bank has to approve each contractor you use and disperse the money to them directly which is when you start paying interest on that money. It can take them any amount of time to finish the job and you continue to pay the interest.

I hope this helps!

Re: cost to build a home?

I just built a home on a piece of land. The whole process took about 2 years, and though we have moved in, there is still a ton that we have to complete. It was probably the most stressful 2 years I have ever been through. Yes in theory it sounds great. On LI you are not going to find a "cheap" lot. Builders go after them very quickly. $200 a square foot is a good guesstimate of how much it costs to build in the North East, there are so many variables though, and like a previous poster mentioned lot loans and construction loans are very different than mortgages. They are very costly when you can even find a bank that will work with you, many stopped writing construction loans. If you have any specific questions FM me.

Re: cost to build a home?

Also building from scratch means your taxes will be $$$$$$$$$$

Re: cost to build a home?