How to Build a New House Debt Free

Doing the project in phases spreads out the cost if you don't have it all upfront.

Doing the project in phases spreads out the cost if you don't have it all upfront.

Building a home without a mortgage seems like an unrealistic dream to most people, but with patience and a detailed saving plan it is possible. It takes time to accumulate the money necessary to build a home without any debt and it might need to be built in phases as the money comes in. You miss out on the instant gratification of a new home right away that you would get by taking out a mortgage, but think of all the ways you could use the money that would normally go toward a house payment.

Calculate the amount of money you have available toward the new home. Estimate how much you need to complete the project based on the home's size and features.

Reduce your current housing expenses as much as possible. Sell your home and rent a small property, move to a studio apartment or move in with your parents if they'll let you. While it might be a sacrifice now, cutting your housing expenses frees up more money toward your home, which will get you into your mortgage-free new home faster.

Analyze your budget for your other expenses, looking for ways to cut the budget. Cut out all nonessentials, such as cable, gym memberships and dining at restaurants, to give you more money toward the home-building project.

Sell items you no longer need or want. The money you earn goes toward building the new home. Selling items also helps if you are downgrading to a smaller home to save on housing expenses.

Purchase a piece of land for your home once you have enough money saved up for it. If you can handle it, living in a trailer on the land is another way to cut your living expenses.

Manage the building process as the general contractor to save money. Keep in mind you will save money but you will need to commit time and energy to the project.

Build the house in phases as you save up the necessary money. For example, you might excavate for the basement one month, pour the foundation the next and continue on until the home is built. This might extend the length of the project, but it is an option if you don't have all the necessary money up front to complete the project.

Finish as much of the home as possible on your own. Install your own flooring, paint the walls yourself and install your own cabinets. The more work you can handle yourself, the lower your total building cost.


  • If you plan to have a guest home or separate in-law suite on the property, consider building it first. Because of the smaller size, it will cost less and you can live in it until the main home is built.
  • Focus more on the layout and size of the home when you build. You can add extra touches or upgrade the furnishings down the road to keep the initial building costs low.

About the Author

Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience comes from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.

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