At Reliable Design-Build-Remodel, we understand that deciding between building a new home and buying an existing one is a major life choice—both financially and emotionally. As experienced new construction builders serving Birmingham, AL, and surrounding areas, we’re here to offer clarity and guidance for homeowners who want to make the best decision for their future. In this blog, we’ll walk through some of the most common questions about building a new home, with honest, helpful insights from our years in the field.
Is it cheaper to build or buy new construction?
This is one of the most common questions we receive as new construction builders. The answer depends on several factors, including location, materials, labor costs, and the current real estate market. In Birmingham, the cost to build a home can sometimes exceed the cost of buying an existing one—especially when the market is saturated with inventory. However, building new means you get exactly what you want: modern systems, energy-efficient designs, and the ability to customize floor plans and finishes to your exact preferences. It also reduces the likelihood of surprise maintenance costs down the line. While upfront costs may be higher, long-term savings and satisfaction often make building the better value.
How much money do you have to put down on a new construction home?
The down payment for a new construction home typically ranges from 5% to 20% of the total project cost. The exact amount depends on the type of loan you’re using, the lender’s requirements, and whether you’re buying from a builder or hiring a contractor for a custom build. For many buyers in the Birmingham area, putting down around 10% is common when financing through a traditional construction-to-permanent loan. At Reliable Design-Build-Remodel, we often collaborate with lenders and financial institutions to help our clients understand their options and plan accordingly for both the down payment and ongoing construction expenses.
What does a new construction home cost?
Costs can vary widely depending on the design, size, finishes, and location. In the Birmingham metro area, the average cost of a new construction home typically ranges from $150 to $250 per square foot. That means a 2,000-square-foot home could cost anywhere from $300,000 to $500,000. Higher-end finishes, complex floor plans, or challenging site conditions can increase this number, while more modest designs and efficient layouts can help keep costs in check. Our team at Reliable Design-Build-Remodel works closely with homeowners to create realistic budgets and select materials that strike a balance between style and cost-effectiveness.
Can I build a house for $250K?
Yes, it is possible to build a home for $250,000, especially in areas with lower land costs and by making thoughtful decisions about the size and scope of the project. Many of our clients who are working within this budget choose compact floor plans, simplified rooflines, and durable yet affordable finishes. At Reliable Design-Build-Remodel, we specialize in maximizing value at every price point. We’ll guide you through smart design choices that help control costs without compromising on quality. It’s all about strategic planning, efficient construction, and working with a builder who respects your financial goals.
Can you get 100% financing on a construction loan?
While 100% financing is less common, there are a few paths that might make it possible under specific conditions. Some government-backed loans, such as USDA or VA construction loans, may offer full financing for eligible applicants. In most cases, lenders require a down payment or proof of significant equity in the land. Additionally, some lenders might offer full financing if the appraisal shows that the completed home will have a value significantly higher than the cost to build. We always recommend speaking with a trusted mortgage broker or lender to explore your financing options and determine what’s possible based on your credit history and project details.
What credit score do you need for a construction loan?
To qualify for most construction loans, you’ll typically need a credit score of at least 620. However, for the best rates and terms, a score of 680 or higher is preferred. Lenders use your credit score to evaluate risk and determine your eligibility for different loan programs. In addition to credit, they’ll also look at your income, debt-to-income ratio, and the specifics of your construction plan. At Reliable Design-Build-Remodel, we’ve seen firsthand how important preparation is—having a clear budget, a vetted builder, and solid financials can go a long way in securing favorable loan terms.
Do new builds pay closing costs?
Whether or not closing costs are covered in a new build often depends on the builder, the lender, and the terms of the sale. In many cases, buyers are responsible for closing costs, which typically range from 2% to 5% of the home’s total price. However, some builders offer incentives that may include partial or full coverage of these fees, particularly when you use their preferred lender or title company. If you’re working with a custom builder like Reliable Design-Build-Remodel, we’ll help you understand all the costs upfront—including any associated with permits, inspections, and final loan closing—so there are no surprises.
Building a new home is an exciting journey—and one that comes with a lot of questions. At Reliable Design-Build-Remodel, our goal is to make the process approachable, transparent, and rewarding. Whether you’re dreaming of a custom home from the ground up or exploring financing options for your project, we’re here to guide you every step of the way. As trusted new construction builders in Birmingham, we combine craftsmanship with communication, helping our clients build homes that match their vision, budget, and lifestyle.
Reliable Design-Build-Remodel are a full service general construction firm and new construction builders operating in the Birmingham metro and Jefferson and Shelby County areas and surrounding communities, including Birmingham, Helena, Chelsea, Mountain Brook, Hoover, Homewood, Montevallo, Alabaster, Vestavia Hills, and Pelham, with over 30 years of servicing our valued clients. Offering full service suite of general remodeling, design and build services. Our specialties include bathroom remodeling, kitchen remodeling, exterior renovations, interior renovations, painting, and more!
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