When you’re financially able to build your own home, one should be careful when making decisions. Building a house from scratch is never an easy task, nor is it an easy decision to make. If you’re not cautious, you can lose a lot of cash, not to mention end up with a home that can’t meet your expectations.

If you have plans building a house this year, make sure to take note of the following home construction mistakes.

Clean up credit mistakes and improve your FICO score

Construction loans have higher standards when it comes to their requirements. You’ll need to have a high credit score of at least 680 to qualify. Also, make sure to clean up your credit report to increase your chance of getting approved.

Assuming you don’t need to be pre-approved just yet

One of the worst mistakes when it comes to building a house is the failure to get pre-approved before doing anything. Some people think buying a piece of land is the first step in constructing your home. In reality, you need to get pre-qualify first so you’ll have a clear understanding of how much you can afford and what types of construction loan your lender can offer you.

Good Read: Loan Preapproval: A Smart Move for Buyers

Poor location and lot choice

Choosing your future home’s location is a crucial task.It will be your place of residence for a long time which makes it a must for you to scout the area, make sure it is safe, convenient and can cater to your lifestyle. You also need to consider the lot as your construction expenses can skyrocket if your lot is hard to erect a building.

Failure to shop around for lenders

Finding the right lender is as crucial as finding the right builder. Any lender would take an opportunity to offer you a one-time close or a one-time close construction loan program as long as you’re qualified for a loan. Make sure to do a background check, compare rates, ask questions and shop around for lenders before settling on a lender.

Not considering a One-Time Close Construction Loan

Such a construction loan type allows you to lock in the interest rate. It means you’ll have a fixed interest rate which is the only thing you need to pay during the stage of construction. If you already have a definite timeline and plans in mind, go for a One-Time Close Construction Loan.

Changing your mind after construction started

Making some changes during the planning of your house is normal. However, refrain from changing your mind once construction began. It won’t only cause delays but can take a huge toll on your budget. Make sure not to rush the planning of your home.

Not having a contingency reserve

As part of your risk management, make sure to have an adequate contingency reserve especially if you plan on hiring your contractor. It is an extra 10% reserve on top of the estimated cost which will cover in case unforeseen events happen during construction.