Home Financing 101: Budgeting & Planning for Your Custom Build in Waco

So, you want to build a custom home in Waco, Texas and are wondering where to start. You’re in the right place! Jim Bland Construction, a custom home builder serving the Waco area, has over 50 years of helping clients design and build their dream houses. 

Because we’ve been doing this so long, we know that one of the first questions on your mind is probably, “How much is this all going to cost?”

Since this is such a common question, we already have a Cost Guide ready for you to explore, which breaks down all the factors influencing the costs of your custom home investment.

And to help you determine what to budget for when building a custom home, we've put together this guide to take it a step further. We’ll discuss budgeting and planning for your custom home build, diving deeper into financing options, where to splurge vs. where to cut costs, and hidden costs to watch for.

Let’s take a detailed look at what you should consider when budgeting and financing your custom home!

Breaking Down the Cost of Building a Custom Home

In central Texas, including Waco, the average cost to build a custom home ranges from $180 to $300 per square foot, depending on several factors, such as design, size, and materials. 

However, this estimate typically excludes land acquisition costs and site preparation. 

Key Cost Components

• Land Acquisition: Prices vary on location and acreage. The average cost per acre in Waco is around $7,300 to $20,000 for unfinished land. 

• Site Preparation: Costs can range from $10,000 to $100,000, depending on the property’s condition and required work. When looking for lots, a flat space is your best bet to cut these costs. 

• Permits & Fees: Expect to pay between $5,000 and $15,000 for necessary permits and associated fees. 

• Design Services: Architectural and design fees typically fall between $15,00 and $50,000. Jim Bland Construction can help with this aspect of the process. 

• Construction: The primary building costs, influenced by materials and labor. 

• Landscaping & Utilities: Additional expenses for landscaping and connecting utilities can add $10,000 to $50,000. 

During the land acquisition part of building a custom home, there are subdivision lots that already have utility hookups available, though the land might be more expensive. However, it’s a good idea to compare these costs before making a final decision to ensure you’re getting the best price. 

Custom Home Financing Options & Rebates

Construction Loans

These short-term loans cover the building phase and typically require a small down payment. Interest rates are often higher than standard mortgages, and funds are disbursed as construction progresses. 

Construction-to-Permanent Loans

This option combines the construction loan and the permanent mortgage into a single loan, simplifying the process and potentially reducing closing costs. 

Land/Lot Loans

If you’ve found the perfect plot but aren’t ready to build, land loans can finance the purchase, allowing you to secure the location for future construction. 

Where to Splurge vs. Where to Save

You may be wondering where you can splurge on features for your custom home and where you should save money. This is not necessarily the same for everyone, as we all have different lifestyles and needs when it comes to enjoying and being comfortable at home. 

That said, there are areas of your build to pay attention to before adding extras. 

Areas to Consider Spending More Money

• Energy Efficiency: High-quality insulation, windows, and HVAC systems can reduce long-term utility costs. 

• Kitchen & Bathroom: These spaces often provide the highest return on investment and daily enjoyment. 

• Structural Integrity: Investing in a solid foundation and quality framing ensures longevity. 

Areas to Consider Economizing

• Finishes & Fixtures: Opt for mid-range options that offer durability and aesthetics without premium prices. 

• Floor Plans: Simpler designs with fewer corners and angles can reduce construction complexity and costs.

Hidden Costs to Watch For

There can end up being some hidden costs during custom home building that you don’t anticipate.

Permits & Fees

In Waco, permit fees can vary based on the project’s scope. For example, residential structures are charged $0.25 per square foot, with additional fees for plan reviews and specific installations. 

Site Development

Clearing land, grading, and addressing drainage can add unforeseen expenses.

Utility Connections

Extending water, sewer, electricity, and gas lines to your property can be costly, especially in rural areas. 

Change Orders

Modifying plans during construction can lead to increased costs and delays. 

Landscaping

Designing and implementing outdoor spaces can add $15,000 to $50,000 to your budget. 

Make Your Dream Home a Reality With Jim Bland Construction

Through careful, detailed budgeting and transparent communication, Jim Bland Construction can help you achieve your goal of having a custom-built home in Waco, Texas. We are proud to be a custom home builder serving the Waco area.

Our teams ensure that your custom home is made with quality craftsmanship and excellent customer service throughout the process. Put your trust in Jim Bland Construction for your new custom home! 

Call us today at 254-772-6508 for more information, or send us a request online.