Are you ready to get started with your barndominium build but not quite sure where to start? Then this blog is for you! This topic is one of our favorites to share because we have been in your shoes! At Back Forty Building Co., we not only design and build Barndominiums and Shop Houses…we live in them, too! Our family created Back Forty Building Co. to be a true resource…whether you’re dreaming, do-ing, or DIY-ing! We know that your home is one of the most important and meaningful investments you’ll ever make, and it’s our honor to be part of that process!
Get an idea of the budget for your barndominium:
Having an idea of your overall budget is really the first step in determining if building a barndominium is feasible, and will help guide decisions on how much you can spend on land, how large of a home you can build, and other important factors. For more insight into how much does it cost to build a barndominium check out our blog post here.
If you’re still in the “dreaming” phase, and plan to use a new construction home loan for financing, it can be helpful to use free online mortgage calculators to figure out what you can afford. You also may already have a mortgage that you’re comfortable with, and this can be a good figure to use when deciding how much of a loan you want to take out on your next residence.
Here are three things to consider when determining your budget for your barndominium build:
- How much you’ll need down (typically at least 20% of your financed loan amount). So, if you plan to borrow $300,000, you’ll need about $90,000 saved as a down payment.
- How much you can afford for a monthly mortgage payment. Most banks will use something called “debt to income ratio” to determine how much they will lend to you. Your debt to income ratio is how much you “owe” in various debt service payments each month (such as a vehicle payment, credit card payments, student loans etc). Your income is calculated off your gross income (before taxes). A good ballpark figure to use is 40% of your income can be consumed by debt payments. So, if you make $1000 a month in gross income, a bank will only lend up to the point that your debt payments (including your mortgage) are no more than $400/month (or, 40% of your income).
- How do you use this information? We recommend using a free online calculator to figure out how much your monthly mortgage will be, based on how much you plan to spend on your home and land, and current interest rates. Once you figure out what your estimated mortgage is, add it to any other debt payments you have, and then divide that by your gross income. If this number is less than 40%, you’re good! If you get more than 40%, you may need to pay off debt or reduce what you plan to spend on your barndominium/land, to be able to qualify for a home loan.
If you’re ready to pull the trigger and start building, and you’ve completed the above steps as a “gut check” for your budget, then we recommend talking to a bank/lender in your area. Not all lenders offer new home construction lending, so be sure to check that they have a loan product that will work for you, before setting an appointment!
Secure land to build your barndominium on:
Many of our clients already own land that they want to build on, that is fantastic! If so, you’re ready for the next steps, like doing a “perk test” with your county, to ensure that you can dig a septic system (if you don’t have access to city sewer services), or completing any surveys or soil studies that may be required to prepare your build site.
If you do not already own land…
…now is the time to call a licensed realtor in your area and start the search! Some of our clients pay cash for their land, some of our clients use a land loan and then wait a period of time before building, and some of our clients will wrap their land purchase into their new construction loan. Your lender will be able to provide you with options.
Having trouble finding land?
Searching Craigslist or other FSBO sites may be helpful. If you have an area you like, or land you think someone may be willing to sell, you can use property search tools through your County Assessor’s site, or OnX Maps, to find names and addresses or property owners…old fashioned door knocking or sending a letter doesn’t hurt, especially when trying to buy land in areas with few options or high desirability!
Purchase barndominium plans:
This step may happen simultaneously, or in some cases, even before finding land. We just advise that you don’t complete this step until you have an idea of your rough budget (so that your home can be designed accordingly!)
If you are financing, your lender will require house plans in order to approve your home loan. You also will need house plans to get bids from builders and subcontractors. The bottom line? It’s hard to get the ball rolling until you have house plans.
A great way to keep your barndominium building ideas and inspiration in one place is to create a Pinterest board or Houzz idea book. This allows you to gather your ideas in one space and narrow down the type of floor plan that will work best for you. There is a lot of great advice and floor plan inspiration on Pinterest, you can even find some on our page here.
Another reason you will need house plans is for pulling building permits.
Some counties and building departments will allow hand-drawn plans, but most will not. Your building department will be able to tell you what documents are required in order to apply for a building permit. Many building departments will post a “checklist” of plan requirements on their website (see an example here), if you can’t find permitting requirements, just give your planning department a call and ask for a checklist of the documents you’ll need to submit when you apply for your building permit.
Find a barndominium builder:
Many people use a Builder/General Contractor for their home build. There are a few reasons for this. Some people may not have the time to manage a build themself. Others may not have the skillset, and some people may not have the interest. If you’re using bank financing, most banks will not permit an owner-build, so you’ll have to find a licensed, approved builder.
In some areas, you may be able to find a builder with barndominium experience. There are also a lot of Barndominium forums and Facebook groups where you can search for builder recommendations. In some areas, barndominiums may be a newer or more uncommon type of home and you may not be able to find a barndominium-specific builder. In those cases, going to any custom home builder in your area is a great start. Your steel building or pole barn supplier may also have good recommendations for you!
Building a barndominium can, in some cases, take a little extra work and “sweat equity” than buying a conventional home off the market. Don’t be discouraged! There are hundreds of thousands of barndominium owners across the U.S, and an increasing number of resources for would-be barndominium dwellers….it can be done! With a little persistence and effort, you too can be living the barndominium dream.
Ready to get started? Check out our top barndominium plans here!