Can You Build Your Home Without a Mortgage?

Having a home free and clear is a dream of many, yet there are those who are wary of acquiring a mortgage just to build a home. With the incidents that have taken place over the last few years that have all the realty values dropping, mortgage payments being missed left and right, and foreclosures happening all over, who can blame them?

It is possible to build a home without a mortgage, but be prepared. Having to pay for all those costs outright requires nerves of steel. It's best if you have a large enough nest egg to cover your expenses as it's really overwhelming if you're not prepared.


If you want to have a contractor build your home, you may have a bit of trouble if you don't have a mortgage. It's not that the builders will look down on you, but they need to be sure that you can finish building your home! Most will sub-contract their work and would need to be able to hire workers without being worried that they'd be left to foot the bill. You'll need to present proof that you can pay for everything. This is normally done through a downpayment.


The land is another problem in itself. Never build on land that you don't have ownership to. You can use a loan to purchase the land and you can also buy the land on your own. It's always possible to have the land first then build later on.


You can build the house on your own, but that doesn't exempt you from getting the required permits and permission from the city. Insurance against hazards and real estate taxes also have to be paid for. It's also best to know straight from a builder the exact costs per square foot. You my be surprised to find out exactly how much you'll have to pay!