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We all have dreams of being homeowners someday. The only problem is that the price of housing is going up and up and up. This means that, for the vast population, it is getting harder to afford a home. Consequently, we’re taking out bigger mortgages than our ancestors, leaving us in more debt than ever before. 

Naturally, you want to try different ways of avoiding debt when buying a home. The chances are you can’t ever avoid it completely, but can you reduce it? 

Yes, you absolutely can. Having said that, there are misconceptions surrounding how you can avoid lots of debt when owning a home. Many people assume that building your house from scratch will help you save a lot of money. Indeed, there are stories of people that have built a home for under £100,000 – which is madness. So, is the secret to reducing your debt building your house instead of getting a large mortgage? 

Well…it depends. There are instances where you can definitely save money this way, but there is one very large caveat to consider…


Do you already own some land?

You can’t build a house without any land present. Therefore, you need to be a landowner before you can think about building your dream property. Now, there are definitely times when someone can own land – normally, this is because it has been passed down through the family. Certainly, families with a farming background may own lots of plots of land for generations. Therefore, you can build a house whenever you want, bypassing the costs of purchasing land. 

In this scenario, it will most certainly be a lot cheaper to build your home. The total cost will be hardly anything compared to a mortgage, meaning you probably won’t need a massive loan to get your home. If you’ve been saving, you may be able to avoid a loan altogether. But, the chances are you will still need one to cover construction fees, but it will be tiny compared to a mortgage.


What if you don’t own any land?

Well, now you have to go through the process of buying land and then building a house. Depending on where you want to live, this could still be as expensive as buying your own home. Granted, you can go through the process of buying a house and land package, which does tend to help you save money over doing the two things separately. 

If you don’t currently own any land, you will need to buy it and pay for all the construction work. Do the calculations to see how much this will cost. If it costs as much as buying a house nearby, is it really worth doing? Plus, consider this, you will have two different debts to deal with. There’s the loan you got to buy the land, plus any loans you got to cover the cost of construction. Dealing with two debts is harder than one big one. 


In conclusion, it is possible to avoid a lot of debt when building your home, but only under the right conditions. If you own land already, go for it! If not, calculations must be made to see how much money it costs compared to buying a house outright.