African-American couple talking to contractor in partially built home
African-American couple talking to contractor in partially built home

building a house: 3 steps to get started

The process may be easier than you think

For some people, building a home is their ultimate real estate dream—and for good reason: It allows you to create a living space that meets every one of your needs and wants, in the place that's most desirable for you and your family. It can be a great way to get it all—your dream house in your dream neighborhood!

Find a builder with a proven track record and values that align with yours

But compared to buying a pre-existing house, building your own can seem complicated. It doesn't have to be. Building can be a more involved process than buying, but it doesn’t necessarily have to be more expensive. Breaking down the steps and making a plan can make the process even easier. Your reward is a house that will meet your family's needs better than any on the market and may cost less, too.

Determine your budget

The first step to building a house is making a budget. Start by determining how much you can spend and how much it will cost to build where you want to live. You can work with a mortgage loan officer to determine what you can afford. Be sure to factor in the price of the land (or the current value of the land, if you already own it), the builder, and the construction materials. Get estimates from multiple contractors whenever possible. You can even work with a full-service contractor who brings in their own architects, helps with design, and more. Also start checking prices and budgeting for the appliances and furniture you'll need for your new home and think about where you want to have the high-end options, mid-tier or lower end. Think about what parts of your house are most important to you. For example, love being in the kitchen? Maybe this is a room you splurge on appliances, but you hold back on bathroom appliances to balance it out. 

That budget will come in handy if you decide to apply for a construction loan—a short-term loan that helps cover the cost of building and can eventually be rolled into your mortgage. Construction loans have variable rates and may require as little as a 5% down payment. A construction loan also lets you draw funds to pay for costs as they come up.

Choose a location and draw up a house plan

Where you choose to build can impact your overall happiness, so be aware of its effect on your pocketbook. Start by checking online real estate sites such as and for property listings for land parcels. Real estate brokers may be able to give you more detailed information on land costs and pricing trends in your chosen area. Keep in mind that if you want to live in a more rural place, rather than a subdivision, you may have to pay more for necessities like a well and septic system.

A little creativity may help: One common option is to tear down. If you find a house in your desired neighborhood at a low enough price to tear down and build over it or a house with the potential to build onto it or make it your own, you can get your dream house in your dream neighborhood for a lower price than what’s on the market.

If you're interested in a neighborhood without a lot of inventory, try writing letters to owners asking if they are considering selling. Driving through the neighborhood in search of "For Sale By Owner" signs can also turn up parcels that aren't being broadly advertised. These methods can take some time, but a little effort and creativity pays off when you're looking for the perfect place.

Choosing a house plan is an exciting next step. You can opt for one of the many stock plans available, or work with an architect to custom design a house. Be aware that stock plans will likely be cheaper than a custom design by an architect. Either way, this is the time to envision what you want your family's home to look like for years, or even decades, to come.

Hire professionals

When it comes time to do the actual building, you'll want to work with experienced professionals who come with glowing reviews. Your real estate agent or mortgage loan officer can be a good resource for finding a general contractor, who typically selects the excavator, surveyor, carpenter, and other members of the team. Find a builder with a proven track record and values that align with yours. Ask to visit recent projects they've completed so you can see their craftsmanship up close, and speak with former customers to hear about their experiences with the contractor.

After you have your team lined up, you're in a good place. You still have a lot of decisions to make, but they're largely the fun ones: paint colors, door handles, lighting fixtures and other small design choices that, added up, help turn your dream into a reality. Connect with a mortgage loan officer to discuss your options and learn more about building your dream house.

The information on this page is accurate as of January 2021 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.


You are about to go to a different website or app. The privacy and security policies of this site may be different than ours. We do not control and are not responsible for the content, products or services.

Just launched: the new online banking experience

Sign in now to access your account, or download the new app by searching "Your First Financial."