Depending on your age and where you are in life, building the home of your dreams may have crossed your mind a time or two as you outgrow the home you’re in now.
The possibilities are endless when it comes to that next step towards your “forever home” catering to your every need but before you invest any time or money – you’ll want to be aware of costs that will creep up on you if you don’t factor them in beforehand.
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Vieng Sayavongsa, a resident in Saskatoon’s Rosewood neighbourhood, said her family built their home modelled after a show home they liked and were slightly unprepared for the ambush of add-ons.
“The property was a little bit bigger so the driveway had to be a little bit bigger so that was a hidden cost so we weren’t expecting that,” she said
“I would say it was in the thousands, several thousand that we weren’t anticipating.”
The couple has since developed their basement and has yet to tackle the landscaping.
It’s an oversight expert’s say that happens to many and not budgeting properly right from the start for all the small add-ons can lead to a big headache.
According to Deb Murdoch, a mortgage broker with TMG The Mortgage Group, couples can easily pay out of pocket $50,000 or more for the finishing touches on a home.
“It’s not just build the home and move in – there’s lots of extra stuff,” Murdoch said.
“You could spend $30,000 on a basement development depending on how plain it’s going to be or how elaborate it’s going to be.”
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Plus, the cost of putting in that driveway, a new fence, back deck and landscaping – you could even be blindsided by the cost of putting in blinds.
“Get preapproved for what you can afford and if you’re looking at a new build go a little bit cheaper so you can add the ‘Plus Improvements.'”
Purchase Plus Improvements is a product Murdoch said will help you work away on the add-ons after you move in and have the costs rolled into your mortgage but it has to be done right off the hop.
“Add it on to the purchase price of your build and then you pay your down payment based on that minimum five per cent based on the total purchase price,” Murdoch added.
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The other catch-22 for couples to consider is you don’t get the funds up front. Most homeowners will secure a line of credit and once the work is done and inspected, the funds are released.
“So now you pay off your line of credit and it’s all included in your mortgage at a very low interest rate so a lot of people don’t realize that they can do that.”
It also pays off to talk to an expert upfront so they can help you sort through your big purchase before you get in over your head.
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