Frequently Asked Questions

Why use Help-U-Build?

Because we make it possible for the average person, with little or no construction experience, to build their own home, for MUCH less then they could buy it for (by avoiding the typical 20%+ markup of a builder. They pay thousands less than the house is worth, move in with instant equity). We specialize in providing our clients (Owner-Builders) with the knowledge, resources, and expertise in building their own home; while being able to choose the location of their new home, decide on the floor plan, pick which materials are used, and design their house (Paint colors, carpet, tiles, lights, fixtures, etc.) and building it for MUCH less then they could have bought it for, ensuring the financial security of their family.

What is an Owner Builder?

Over the last several years a trend has developed where families have opted to manage the construction of their new home themselves, becoming "owner-builders". The home owner replaces the general contractor as the project manager by gathering bids, scheduling the work and final payment of the subcontractors. This trend is growing, it is estimated that last year more then 125,000 families built their own homes.

Why be an Owner Builder?

Initially most consider the owner builder option for financial reasons. Eliminating the general contractor’s fee can save 10% to 30% on the cost of building a new home. This can mean a savings of $50,000 to $100,000 dollars on an average home. This savings translates into equity, the difference between what the home is worth vs. what is owed on the mortgage. In most cases this equity replaces the down payment; and often eliminates the PMI (private mortgage insurance) requirement.

Another reason to be an owner builder is greater control and security of construction loan funds, giving the owner-builder full control over the disbursement of construction loan proceeds. As an owner-builder, you maintain control of the finances, by determining who gets paid, and when. That way, it ensures you are satisfied with the work, BEFORE the contractor gets paid. Self builders also have greater control over the quality of the materials and workmanship used to construct the home. Unlike a contractor, who's primary goal is profit, the home owner's goal is value. The owner is involved in one project, not several, allowing them to dedicate the time required to focus on the details. It is not surprising then that Owner Builders have a greater success rate at completing these projects then licensed general contractors do.

In the end however, most owner-builders report that the real payoff is the satisfaction of mastering a challenging task while being able to choose the location of their new home, choose the house plans, which materials are used, designing their house (Paint colors, carpet, tiles, lights, fixtures, etc.) all the while building it for MUCH less then they could have bought it for, ensuring the financial security of their family.

What does the term “Earned Equity” mean?
(sometimes called “sweat equity”)

Equity is the difference between the mortgage amount on a home and the home’s actual value based on an independent appraisal.  Earned equity is equity which is created through the efforts of the homeowner.  Earned equity (or “sweat equity”) can be created by eliminating the general contractor, or subcontractor, by actual work being performed by the homeowner.

Equity in your home is the number one way to build financial freedom for you and your family. Home prices and values have steadily risen over the last several years, and will continue to do so. And now, with interest rates on the rise, most folks can't afford as much home as they could just a year or two ago (since the average person pays "retail" for their new home, they must pay top dollar). With HELP-U-BUILD we make it possible to build the home you want, at a price you can afford.

How much of my own personal time is required?

Depending on what stage the house is in, generally only a few hours a week.

How long does it generally take to build a house?

Typically it takes anywhere from 6 months to a year, depending on the size of the house you decide to build.

How much money will I have to put down?

HELP-U-BUILD clients put little or no money down; they design and build the exact home that they want; and move in with tens of thousands of dollars of instant equity.

Our clients pay "wholesale" by avoiding the typical 20%+ markup of a builder. They pay thousands less than the house is worth, move in with instant equity, and get the benefit of raising values while locked into their lower priced mortgages. The average person goes to a realtor or builder to buy a home; pays exactly what the house is worth; and must make a large down payment, or take a higher cost mortgage in order to finance most or all of the purchase. Often times, the average person must "settle" for less than they really want, due to these problems. At HELP-U-BUILD we make it possible to build a bigger house, for much less then you could buy the exact same house for. We help you get the materials you want, at the cheapest price possible. We help you get expert contractors at a discounted rate, all adding up to huge savings for you in the building process. 

How does the Construction Loan process work?

When you build your home, you actually begin with a temporary construction loan that is converted to long-term financing once you move in. Construction loans are riskier for banks because, unlike normal home loans that have a finished home as collateral, there may not be anything there if someone defaults on the loan. Consequently, not all banks will do construction loans and those that do usually charge a higher interest rate then the long term mortgage.

With a construction loan, the bank gives you a line of credit up to a certain amount (determined by the cost breakdown and price of your lot). During the course of construction, you will periodically make withdrawals to pay for building materials, subcontractors, and even the lot. However, unlike your long term financing, you do not make monthly payments on your construction loan; the interest for the construction loan is factored into the cost of building your home. There is a line item on the cost breakdown for construction loan interest.

Once your home is finished, you convert your construction loan into long term financing, frequently in the form of a 30-year fixed. This brings up notable issue you should remember when building--there are two sets of closing costs, one for your construction loan and one for your long term loan.

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Copyright 2007 by Help-U-Build LLC. All rights reserved.


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