There’s something incredibly rewarding about designing and building your own home—choosing the layout, the finishes, even the view from your kitchen window. But building from scratch isn’t just a creative process—it’s a financial one, too.

Before you dive into floor plans and Pinterest boards, it’s important to understand the full cost of building a home, and how a construction loan can support you through each step.

What Goes Into the Cost of Building a Home?

When people think of home construction, they often only think about lumber and drywall. In reality, there are multiple components that make up the total cost.

Here’s what you should be budgeting for:

1. Land Purchase

You’ll need to purchase the lot before you can build. The price varies by location and size, and may also include:

  • Survey fees
  • Title and closing costs
  • Utility hookups (if not already on site)

2. Site Prep & Foundation Work

Once you’ve secured your land, you’ll need to prepare it for construction:

  • Tree and debris removal
  • Grading and leveling
  • Pouring the foundation

3. Permits and Professional Fees

Local governments require various permits before building can begin. You’ll also need to hire professionals, such as:

  • Architects and engineers
  • General contractors
  • City/county inspectors

4. Construction Materials and Labor

This is typically the largest cost and includes:

  • Framing, siding, roofing
  • Electrical, plumbing, HVAC systems
  • Interior finishes and cabinetry

5. Finishing Touches

Don’t forget about:

  • Flooring and paint
  • Landscaping and driveways
  • Appliances and fixtures

6. Contingency Funds

It’s smart to plan for the unexpected. Supply delays, design changes, or price hikes can throw off your budget. Setting aside 10–15% for contingency can save you stress later.

How a Construction Loan Can Help You Manage Costs

A construction loan is a short-term financing tool that provides funding as your home is being built. At Peoples Bank & Trust, our construction loans are designed to give you peace of mind while keeping your project funded and on schedule.

Key benefits include:

  • Draw-based funding: Funds are released in stages based on construction progress, so you only borrow what you need, when you need it.
  • Interest-only payments during construction: You’ll only pay interest on the amount that’s been used—not the full loan.
  • Local decision-making: Our lending team understands the local market and is available to answer questions every step of the way.

When your home is finished, your construction loan can be converted into a permanent mortgage, simplifying the transition.

Why Build with PBTC By Your Side?

At PBTC, we’re here to help you every step of the way. Our lending team will work closely with you and your builder to ensure a smooth process—from the first shovel in the ground to move-in day.

We offer:

  • Competitive rates
  • Construction and permanent financing
  • Personalized support from a team that truly knows your community

Ready to Start Building Your Future?

Let’s talk about how we can help you secure financing that fits your vision. Visit pbtc.net or stop by your local branch to learn more.

Speak to a Home Loan Specialist

Peoples Bank & Trust Co.
Member FDIC, Equal Housing Lender
NMLS #407724