29 Oct 2021


When you purchase a piece of land to build a home on, you have two options. Both options involve applying for a construction loan. While one option has you choosing to work with a contractor to complete the construction project, the other option is you serving as the primary contractor. Being both the unique owner and the builder has advantages and disadvantages. The positives and negatives need to be considered before starting the construction process. 

Advantages of Being an Owner/Builder

If you are handy and know the basics of construction, wiring, and plumbing, you may benefit from being an owner/builder. Some advantages of doing so include:

  • Saving money: When you hire a contractor, you not only have to pay for the materials, you have to pay for the labour. Doing most of the construction work yourself saves you paying for labour costs. 
  • Final Say: When you build your home, you don’t have to listen to any one else’s opinion about which features, fixtures,and finishings will work best in your home. You can choose the final look of your home, resulting in a sense of personal satisfaction of not only building your own house but getting to choose the style. 

Disadvantages of Being an Owner/Builder

 Even if you are handy and know construction basics, there are some disadvantages to being an owner/builder, including:

  • Time: While you may save money on labour costs by building your home yourself, it will take you longer to do so. Most homes can be built in 6-months, and thats with hiring full-time contractors. If you’re building your home on your own and have your own job, it will take you longer. 
  • Loan Risk: Most lenders are willing to approve construction loans if you hire a reputable contractor. If you’re the owner/builder, lenders may consider this loan more high-risk. If you are approved, you may have a higher interest rate. 

If you are interested in applying for an owner/builder loan, the lending specialists at Mortgage House can help. We can help you find the perfect loan for you with competitive interest rates. 

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