How do You Start Building a Home in SW MI: Steps you can’t skip!

Building a new home is an exciting journey. It’s your chance to design a space that fits your lifestyle, family, and future. But before you break ground, there are a few critical steps to make sure your project is both possible and financially realistic. Having an real estate team guide you through the process simplifies the process and ensures that you have the information you need to make wise choices.

If you’re wondering how to start building a house in Southwest MI, here are a few of the first moves you should make.

✅ Define Your Priorities

The first step in the home-building process is to outline your must-haves. This not only guides your builder but also helps your lender and REALTOR® give you accurate information.If you're wondering how to start building a house in Southwest MI, you're in the right place. The Veenstra Team has helped countless families in Southwest Michigan make the leap from dreaming about a home to actually building it.

This comprehensive first steps guide will walk you through a smart starting plan! These are the essential first steps that will set your project up for success. From defining your priorities to securing financing, we'll cover everything you need to know to begin your home building adventure with confidence.

Start with some Questions to ask yourself:

• Size – How many square feet will fit your lifestyle?

• Bedrooms & Bathrooms – What do you need now and in the future?

• Basement & Garage – Walkout or slab? Two-car or three-car garage?

• Concept – Do you picture a one-story ranch, two-story traditional, or a modern design?

• Lot & Neighborhood – How much land do you want? Do you prefer a private lot or a neighborhood with sidewalks and amenities?

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✅ Budget Planning: Understanding Construction Loans in Michigan

Paying for a new build is not the same as buying a house that’s already built. That’s why it’s important to sit down with a lender early so you know how the money side works.

Here are the basics:

Buying the Lot vs. One Loan for Everything

• Sometimes you buy the lot (the land) first and close on that.

• Other times, you can get a “one-time close” loan that covers both the land and the house in one step. Ask your lender which option works best for you.

How the Builder Gets Paid

• Builders don’t get all the money up front.

• The bank pays them in parts, called “draws,” as each stage of the house is finished—foundation, framing, plumbing, and so on.

What the Builder Must Do for the Lender

• Lenders want to be sure the builder is professional and reliable.

• They ask for things like insurance, a building license, a cost breakdown, and a signed contract before releasing money.

Do You Need to Sell Your Current House First?

• Many people use the money (equity) from selling their current home as a down payment.

• Options include:

  • Sell first and rent while your new home is being built.

  • Use a bridge loan, which gives you money to start building before your old house sells.

  • If you qualify, you might be able to carry two homes for a short time until your current house sells.

Why Talk to a Lender Early

• You’ll know how much cash you need up front.

• You’ll see what your monthly payments will look like.

• You’ll find out if you’ll have one closing or two.

✅ Find the Right Lender!

Not all lenders are the same, especially when it comes to new construction. Some lenders rarely work with home builders and may not understand the unique timelines, draw schedules, and requirements that come with financing a home that doesn’t exist yet. The right lender is one who has strong experience with construction loans, communicates clearly with both you and the builder, and is flexible enough to navigate the unexpected twists that can arise during the building process. We have the names of pre-vetted lenders who have successfully helped our clients get to the finish line—with great guidance every step of the way. Your “favorite lender” for pre-constructed homes may not be the best choice for a new construction home (and you don't want to learn this after you are in the middle of a process that turns sour.)

The Veenstra Team can give you some names of lenders that have a track record, exceptional customer service and will get you to the closing table. (And no—we don’t get any money for recommending these people, but you will get some benefit by letting the lenders know we recommended that they call you. Lenders like to work with us and make sure our buyers receive the best service!)

✅ Step 4 – Find Out How Much Your Current Home is Worth

When you’re planning to build, knowing the true value of your current home isn’t just “nice to have”—it’s essential. Why? Because it gives you the power to plan your budget with real numbers, not guesses.

• The equity in your current home (the money you’ll walk away with after selling) often plays a big role in financing your new build. Understanding what that number looks like today helps you make smart decisions about when and how to move forward. That’s where the Veenstra Team comes in again in a very active way. We provide a free, no-obligation market analysis that shows what your home could sell for right now. Even if you won’t be selling until the end of the build, we’ll refresh the numbers when the time comes so you always have up-to-date information.
  
  Unless you plan to pay cash to build, knowing more about the current value of your house will undoubtedly help you (and most likely your lender) make a solid financing plan. Most people typically have 3 options:
  OPTION 1: Sell Before Building
  If you sell your current home first, the equity you gain can go directly toward your construction loan down payment. Knowing your home’s value helps you decide if selling first will give you the funds you need to start building confidently.

  OPTION 2: Bridge Financing
  Bridge loans allow you to tap into the equity of your current home before it sells. The lender bases this on what your home is worth in today’s market. Having an accurate market valuation shows both you and the lender how much equity is available to use as short-term funding for your build.

  OPTION 3: Carry Two Homes
  If you plan to keep your current home while building, your lender will look closely at your income and debts to make sure you can manage both payments. A realistic market valuation is still important—it gives you (and your lender) a sense of how quickly you could sell if needed, and what financial cushion you’d have from that sale.

Final Thought

Starting your home-building journey with clear priorities, a realistic budget, and a pre-approval will make the rest of the process—choosing a builder, designing floor plans, and picking a neighborhood—much smoother.

The Veenstra Team has helped countless families in Southwest Michigan make the leap from dreaming about a home to actually building it.

📞 Call us today at 269-350-5514 or visit MyKalamazooRealEstate.com to take your first step toward building your dream home.