Financing
Where do I get the money?
This is very interesting subject. Indeed, where an average person can get money to build a house?
One may suggest a bank. Try. As my mortgage specialist noted "They run the show", especially during a construction boom. I had approached five or six banks. Most of them said "no" right away. One or two asked about my building experience first.
The bottom line was that my proposition had been "too risky" for them. A bare land was all I had money for and it had no equity, of course.
Luckily, I had a good credit history and many financial institutions offered low introductory interest rates and high limits on their credit cards. I also managed to get a couple of low interest credit lines.
Retailers such as the Home Depot or Revy often sold their goods with no interest, no payment for six months to a year. I rented a low cost apartment and paid off some of my debts as I went.
Basically, what I did for two and a half years of the house construction was juggling the debts. I was borrowing from one place and transferring the balance to the other when the introductory period had expired.
Only after the house had been finished, insured and the appraisal had been done, I was able to consolidate all my debts into a single mortgage.
Construction cost and saving
Below is a rough estimation of certain elements of my house construction cost. The appraisal value of the house in 2004 was $240,000. If you add the cost of land to the construction cost, then I saved about $120,000 or 50% cash by building the house myself. Now, if you take into account the 6% interest on that 50%, amortized over 25 years, then the additional savings on the interest will be $114,678 or the total savings of $234,678.
Now, given that the value of the real estate in Alberta had at least doubled over the last three years, it was not a bad investment after all.
| Excavating | $1,500 |
| Foundation | $10,000 |
| Framing | $20,000 |
| Windows and exterior Doors | $13,000 |
| Interior doors | $1,000 |
| Roofing | $2,000 |
| Wood stove | $3,500 |
| Wiring | $3,500 |
| Water heater (tankless) | $1,000 |
| Plumbing | $6,000 |
| Septic system and water well | $9,000 |
| Heating (electrical baseboards) | $2,000 |
| Insulation | $4,000 |
| Drywalls and suspended celing | $8,000 |
| Painting | $2,000 |
| Exterior finishing (vinyl siding) | $4,000 |
| Flooring (laminate) | $5,000 |
| Build-in appliances | $3,500 |
| Cabinets | $3,000 |
| Finishing | $5,000 |
| Driveway, Ladscaping, Steps & Walks | $3,000 |
| TOTAL CONSTRUCTION COST | $110,000 |