"Budget at least 10-15% extra for surprises."
Yeah, this is spot on. When we built ours, I thought I was being careful budgeting extra, but even then we got blindsided by some drainage issues that nobody saw coming. Ended up costing us a good chunk more than we planned. Curious—did anyone here find that their lender was flexible about increasing the loan amount midway through construction? Or did you have to scramble and cover those unexpected costs out-of-pocket? We managed to shift some things around financially, but it was pretty stressful at the time. Wondering if there's a better way to handle these curveballs...
"Curious—did anyone here find that their lender was flexible about increasing the loan amount midway through construction?"
That's an interesting point, but honestly, I'd be cautious about relying on lender flexibility mid-build. From my experience, banks aren't always eager to adjust loan amounts once construction is underway. They usually have pretty strict guidelines and prefer everything nailed down upfront.
When we ran into unexpected foundation issues (turns out our soil was way softer than the initial tests suggested), our lender wasn't exactly jumping at the chance to increase our loan. We ended up having to dip into savings and even paused some of the finishing touches until later. It wasn't ideal, but it got us through without too much financial strain.
One thing I've learned from working on multiple developments is that it's often better to have a contingency fund set aside separately from your loan. Even if your lender does agree to increase the loan amount, it can take time—paperwork, approvals, appraisals—and meanwhile, your contractors are waiting to get paid. Having some cash set aside specifically for these curveballs can really ease the stress.
Another option I've seen people use is a home equity line of credit (HELOC) on their current home or another property. It's not perfect for everyone, but it can provide quick access to funds if something unexpected pops up. Of course, you'd want to be careful with that approach and make sure you're comfortable with the extra debt.
I guess my main point is, while it's tempting to think lenders will be flexible, it's probably safer to assume they won't be. Planning ahead with your own backup funds or alternative financing options might save you a lot of headaches down the road.
