Financing Your Build / Assessing Financial Needs

Determining Total Project Cost

When building a custom home, you'll obviously need to have adequate funds to cover all of the expenses. A comprehensive project cost estimate includes various elements, such as land acquisition, design and architectural fees, construction costs, permits, and additional fees. You may opt for loans for some of these things, but we'll help walk you through what you need to know to obtain financing for your project.

You may want to get started with our Cost to Build Calculator, our Affordability Calculator or our project planner available to you in order to get a better sense of what you'll need.

Here's a breakdown of the factors that contribute to the total project cost:

  • Land Acquisition: The cost of purchasing the land where you plan to build your custom home is a significant expense. Make sure to factor in any additional costs, such as closing fees, property taxes, or real estate agent commissions, when estimating the total land acquisition cost.

  • Design and Architectural Fees: Hiring an architect or designer to create your custom home plans is another essential expense. These fees can vary depending on the complexity of your project and the level of detail in the plans. You might also need to budget for engineering services and other consultants, such as a landscape architect or interior designer.

  • Construction Costs: Construction expenses are typically the largest portion of your total project cost. These costs include labor, materials, and equipment needed to build your home. To estimate construction costs, you can either consult with a general contractor or use cost estimation tools available online.

  • Permits and Fees: Building a custom home requires obtaining various permits and approvals from local authorities. These may include building permits, zoning permits, environmental permits, and utility connections. Research your local requirements and fees to accurately estimate these costs.

  • Additional Expenses: There are other costs that you might encounter during the construction process, such as site preparation (clearing, grading, and excavation), utility connections, and landscaping. Don't forget to factor in costs like temporary housing if you'll need to live elsewhere during construction, as well as contingencies for unforeseen expenses.

  • Financing Costs: If you're borrowing money to finance your custom home project, be sure to include the cost of interest, loan origination fees, and other loan-related expenses in your total project cost.

To determine your total project cost, compile detailed estimates for each of the categories mentioned above. Keep in mind that costs can vary depending on factors like location, size, and complexity of your project. It's always a good idea to build a contingency of 10-20% into your budget to account for unexpected expenses that may arise during the construction process.