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Learn To Be Your Own Builder,
Or Simply Understand The Process
Preparing Your Budget
Before you go to a bank or mortgage company they will want to see your budget. In preparing your budget you should include all costs associated with building your project. Besides the actual cost of building there are other costs such as fees for architecture, engineering, utility company fees, costs for furniture, fixtures, etc. For an example of how to set up a typical project budget see our Sample Budget.
Our work sheets show you how to set up costs for each trade as well as owner items not included in the contractor's costs. These are costs that are frequently forgotten when the average person puts together a budget. One way to think about your costs is; I have no costs on day one of planning, so what costs will I incur from the start of the project to the end when I put the key in the door. Your lending institution will appreciate the fact that you have carefully thought out your costs. Our information packet will show you the steps.
Start with a budget work sheet and keep it handy as you plan your project. Each time you think of an item or service needed to be purchased put it on your work sheet. It's also smart to include a “contingency” line item in your budget for items that you miss, and more importantly, items that get changed or added during the construction process. Don’t fool yourself into believing you have all bases covered and won’t need to add things as you progress. Depending on how accurately the budget has been established the contingency can vary from 10 to 20%. Remember, it’s better to plan for too much and not have to use it, than to run out of money for items you had missed.