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What to Know Before Building a House

Many parts of the country are experiencing housing shortages and experts predict a building boom is just around the corner.

According to recent reports from the National Association of Home Builders, 16 percent of adults in the United States are planning to purchase a home in the next 12 months and nearly half of those adults (42 percent) are looking for a newly built home. This is up from 24 percent who preferred purchasing a brand new home in 2020.

There’s a lot to consider when building a custom home. Luckily, WaFd Bank is here to help. Read on to learn what to do before building your dream home. This includes assessing the land and utilities, hiring an architect to draft new home plans and oversee the project, applying for building permits and securing financing.

Evaluate Land for Building

Learning how to evaluate land for building is your first step in the construction process. The ground that makes up your land will determine much about your future home, including where it sits on the property and what types of materials you can use.

Depending on the type of land you are building on, you may need a geo–tech survey. This involves taking core samples of soil to determine whether the land will support a building structure. The city or county that issues the building permit will make the determination as to whether a geo-tech survey is required.

How to Get Utilities to Your Land

In order to build a new home, you’ll need to determine how to get water to your land. Will you have access to municipal water or will you need a well to supply water to your property? You will also need to investigate the availability of utilities or install new access to utilities, like sewer or septic, electricity, gas and/or propane. The city or county that issues the building permit should be able to provide you with guidance on available utilities.

Two construction workers building a house working on roof

Draft New House Plans and Design

This step will probably involve hiring an architect to assist you with the design of your new home. They will also oversee the construction and provide additional services during the building process. Because their plans affect public safety, an architect must complete specialized training, licensing and certification. These requirements are dependent on the city or county where the home is being built.

The architectural plans will include different views or angles of the finished home. They will also include elevations from different points on the property to guide the general contractor in the overall build of the home.

Apply for Building Permit

After you’ve confirmed your plans and cost breakdown for your project, you must obtain a building permit from the city or county BEFORE you can begin building on your lot. The process of applying for a building permit may go through several stages before the actual approval and final permit is issued.

Here are a few things you may be expected to provide:


  • Residential zoning for the area
  • Number of units
  • Maximum square footage in relation to lot size

Environmental impact:

  • Availability of water, power and utilities
  • Your plan for clearing the lot and removing greenery

Building code compliance:

  • Height of the building
  • Whether the property is subject to recorded easements, maintenance, agreements, etc.

During the final review, any revisions required by the city or county will be added to your estimated costs.

WaFd Bank's Loans and Financing

WaFd Bank has been helping people achieve their home ownership dreams for more than 100 years. We have experience in land loans and construction financing. And, unlike many other lenders, we keep all of the loans we make.

  • Make sure to check out our land loan calculator, construction loan calculator and our current interest rates when crunching the numbers.
  • At WaFd Bank, we offer:

    • Short-term and long-term loans on improved land (lot loans) up to $700,000.
    • An All-in-One Construction-to-Permanent Loan where construction and permanent financing are conveniently rolled into one loan. This means your permanent interest rate is locked in before you break ground, eliminating the need to requalify for a loan or to get a second appraisal once your new home is built.
    • A cross-collateral loan program, which may allow you to wait to sell your current home until after you move into your new home.

    Contact us today to learn more about our custom home loan solutions.

    MEMBER FDIC, Equal Housing Lender, All loans subject to credit approval, NMLSR #410394

    Related Article:

    Construction-to-Permanent Loans Explained

    Have Questions?

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