It is important that you have a home-construction-loan-finance estimate telling how much you need to borrow. Your bank will probably give you a cost breakdown list similar to the one below.
The cost estimate listed below is the cost breakdown we used and it was quite complete. The bank had a list they gave us, however, I added in a few things that pertained to us, just as you should do in figuring your estimates.
Cost Estimate Sheet
We bought our tools and even our membership into our contractor's buying club and still stayed below the total construction loan figure.
You first get back bids from most of your major contractors and then select the one you want. Then you add in $15,000 - $20,000 to cover several additional charges, like change orders and additional things you have forgotten. This will also cover interest the bank charges so you won't be left holding the bag in the end.
Ask your bank for their suggested cost estimate sheet, if they have one. Your banker will generally help you so you don't underbid your construction amount.
I padded the figures by using the most expensive sub's bid even tho we sometimes used the least expensive. That way we had more “lee-way” and didn't come up short in the end.
Your home construction-loan estimate doesn't have to be difficult but it does need to be thorough so ask your banker for any helps he/she can suggest. This is not a time for you to be too proud to accept help! Your banker's knowledge and experience is vital to your success in this homebuilding venture.
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