This is not a modest house size. This is McMansion sized. Do you really need a library/study AND a small office? Do you really need a living room AND a family room? Plus another sitting area upstairs? Plus a sitting room in the master? And then a 3rd floor cupola?

A house like that? Midwest? Still close to 1 million unless you're doing builder basic and cheapest materials.

some advice Ive read is find a similar new build and reduce the price by 25% for the land and you have your price.reduce it by another 25% if you plan to gc the build yourself.

^^^ some advice Ive read is find a similar new build and reduce the price by 25% for the land and you have your price.reduce it by another 25% if you plan to gc the build yourself.

I'm sorry, but that's almost laughable. Perhaps the 25% land value might lend a clue to a build price if one is buying a lot in a subdivision and building te standard house in it, but it has no basis in reality otherwise as land values vary widely even within a small geographic area depending on desirability. And the 25% reduction to GC on your own is made to sound appealing to those who want to save money. The reality is most owner/builder wanna-bes don't have the connections to put together the necessary crews and even if they can cobble together the necessary trades, they are a one-off in the eyes of those trades and will not be first on their list for accommodations. The professional builders who keep them working will get their attention and the owner/builder will be twiddling their thumbs waiting for a time slot - time=$$. Reality bites and as an owner/builder I know about it first hand even with a construction background.

To the OP - American midwest is big and vague. Are you building that house in Kennilworth, IL? Multi millions. Building it in Podunk, IA or Armpit, IN or Camoville, WI? Less $$, but probably hard to get your quality expectation met.

Its unlikely there will be a savings for building it yourself unless you've done it before and are able to be on site every work day.

Add up the floor area and consider the nature of the finishes and the profit margins of the local builders to come up with an average cost per s.f.

Or ask a local builder. Better yet hire an architect and get a builder to act as a cost control consultant during the design phase.

It’s impossible to say as there are too many variables.

One thing though: There are two general new home construction realms: Production and Custom.

The latter caters to a totally different demographic that is a lot less cost sensitive than the former so align your expectations accordingly.

That's going to be a pretty large house, with an exceptionally large DR.

I have never had a goal of paying cash for a house. In fact, I couldn't care less if my mortgage is ever paid off - it probably won't be unless I live a lot longer than I expect. I would probably feel very differently if mortgage rates once again went back to the heights there were 40 years ago - paying it off as quickly as possible was the smart thing to do. But they have been so low, and with a fixed rate, my 15 year mortgage is very affordable. But some people like to own a house free and clear. To each his own!

All of your cash . . . depending on the area.

Local architects and/or general contractors will be able to answer your question(s) the best.

if I had to guess in a "mid range" COLA area - you are looking at $1.2M - $1.5M for a custom build on a reasonably priced lot. It can EASILY escalate from there if you start adding fixtures / appliances to cook for 18 people - and you are building "expensive" per sq foot home - several baths, large kitchen, lots of unheated spaces (porches, cupola, garage)

We were on a house hunting mission a few years ago, and looked at a lot of houses with the features we wanted in the area we wanted to live. We got a really good idea of what a house with the features and quality of finshing would cost. In the end, we decided to build (not a custom home, I might add, but not a tract home either, just a single house in a house and land package with a small local builder). We were prepared for the house to cost more than the ones we'd seen due to increases in land value, material costs, and wages - and it did - about 15% more. Still, it gave us a pretty good guideline, so perhaps you should look around for any comparables in you area. As for land value relative to house cost - we built one house where the land was about 35% of the total cost, another where it was well over 50%: like they say, location is everything.

Agree with everyone else. This has big house and 1.5M or more written all over it. But really its all about location and local costs.

Find an architect. Have them help design you what you want and discuss with contractors what that will cost you. Save that much money plus 10-20%, AND then save more because it will be a while (presumably) until you can build and costs will rise for materials and labor.

Paying cash for a home purchase makes no sense at all. Not when loan rates are so low. What you want is the liquidity to pay off the home if the need arises. But let that 1.5M earn more elsewhere.

There is also the fact that you don't have nearly as much leverage over a builder without a bank to blame for having a completion % required before you will issue him a check. Having a bank involved as a scapegoat can be very handy when things get tense.

Or, you might consider something much more modest to begin with, and utilize your public library and neighborhood amenities rather than duplicating them with a magnate mentality. Because I'll bet that you haven't thought about the costs of maintaining that 10,000 house and paying the utilities and taxes every month.

Buy a copy of The Not So Big House.

If you proceed with building this dream home, I would talk with the architect you hire about what your goals are for how you'll live, rather than an inventory of required rooms. As an example, a formal dining room that seats 18 is going to take up a lot of space and cost for a rarely used space. But if your goal is instead to be able to host meals for 18+ plus people, there are other creative ways to solve the problem. My parents routinely host fairly formal holiday meals for 30+ people, and as a result their architect designed their formal dining and living rooms to work in tandem. Their normal dining table holds about 10, but the room is open to the living room via a large cased opening. When hosting larger groups they can turn the table to run into the living room as one large table. It makes the space a lot more functional, and works a lot better than if they had simply told their architect they needed a dedicated dining room for 30.

This is not a modest house size.

I was going to say the same thing. If that's what you want to build, fine -- your house, your choice. But be truthful with yourself -- you're not even remotely describing a "modest house".

some advice Ive read is find a similar new build and reduce the price by 25% for the land and you have your price.reduce it by another 25% if you plan to gc the build yourself.

Doubtful. Very doubtful -- and by that I mean, Not a chance in H - E - double toothpicks. Just to give one reason: If custom builds cost half as much as existing homes, more people would be building.

But some people like to own a house free and clear.

Yes, having grown up without financial stability, I can't tell you what a difference it makes to me to know that each and every brick of my house is MINE - MINE - MINE - MINE - MINE.

Ditto on "No part of this is modest." Followed by, you're including some awfully complex elements (3rd floor cupola) that might make it more difficult for an inexperienced soul to GC, especially if problems arise.

Consider making a NEW list, organized: Needs, wants, and would be nice to have. Then take the list and a budget to an architect. Have a plan drawn up that fits your budget and gets all your needs, most of your wants, and maybe even a few "nice to haves" in there. Bid out the plan to a few builders and proceed!

Yes, having grown up without financial stability, I can't tell you what a difference it makes to me to know that each and every brick of my house is MINE - MINE - MINE - MINE - MINE.

I am not attacking you personally, so much as pointing out the flaw in this reasoning. Please point me to the doctor that will take a couple of those bricks for payment. Houses provide MUCH less financial stability than cash does.

Again, the gentleman across from one of my rental properties just sold his house the weekend before Thanksgiving for $130,000 (a $70,000 loss from the amount he paid 6 or 7 years ago), because he had no cash for the $80,000 foundation repair and couldn't get a loan for it. Had he been able to afford that repair the house would have sold for $260,000 to $280,000. While still a loss you are talking $20,000 versus $70,000.

That is what cash and near cash assets provide, real financial security.

I'm thinking that quite a few things on your list of "needs" are actually "wants." For example, the separate sitting room for the master bedroom, 10 foot ceilings in the basement, and the library/study/family room x2/living room combo. So, i concur with the comment above: figure out what it is you actually "need" first, and then add in the "wants," and lastly, pencil in the "cupola."

I wanted a little cupola, too. Budgetary constraints killed off that idea. *sigh* As happens, with house building.

I suggest revising your list of needs and be more realistic about the house you would like to build. Otherwise, you will be spending so much time and energy chasing money that you won't have any time to enjoy life. If all you want to do is work, why build such a large house?

I am sure the house you would build that includes the items on your list would be a fantastic house. But I don't think you have a realistic project if you want to save enough money to build that house with cash. That amount of cash typically comes from an inheritance, selling a company, lottery winnings or executive golden parachute and not from regular amounts accumulating in savings plan accounts. If you have the financial stability to be able to afford to build, pay taxes on, furnish and maintain such a house, why wait for the cash to accumulate. Live a little now and enjoy the house while you have the interest and energy to deal with the headachesnof having suvh a monster property.

To everyone saying this is not a modest house: I never said that's what we want; I said we want a modest entry foyer. :)

Obviously the house itself would be quite large, and we're well aware of that. (Though probably not as large as some are thinking; my in-laws' place is about 4000 sf and I think it would meet most of our desires nicely if it were laid out differently.)

The problem is that we really do want a good amount of living space, but have no desire for the vaulted ceilings, granite countertops, marble flooring, etc., that you normally find in large homes. We had heard that square footage is cheap and had hoped to build a big square box of a house (no fancy bump-outs or irregular shapes) and get the types of spaces we wanted without paying for all kinds of ultra-fancy finish work.

It doesn't sound like that's going to be in the cards, because there's no way we're going to pay a million dollars for a house almost no matter what. The fact is we'd rather sacrifice some of our own desires and feed a lot of orphans instead.

Thanks for the answers though. Better to get a dose of reality early on in the planning process than in the 3-5 years we'd expected to have the money. :)

Some of your needs seem to be for entertaining a lot of people. You're also talking about saving a million dollars in 3-5 years. But yet you want to cheap out on the finishes. The first two don't match your third. If you're going to entertain, have a large custom house, and can afford saving up cash to do so which indicates you're pretty well off, don't cheap out - the finishes matter.

I'm not so sure I agree that having the most expensive finishes is necessary. But I'd note two things:

First, the finishes aren't really necessarily where the bulk of your budget will go. And, while a simple house is certainly more economical to build than one with all sorts of unnecessary jigs and jogs, 4000+ sq ft is still a LOT of house. A lot of roof, a lot of framing, a lot of drywall. 10 ft. ceilings in the basement is a lot of excavating and a lot of concrete. It all adds up.

Second, while I think you can build a very nice home in that size without coating the surfaces with quartz (I saw a house on the local parade last fall with quartz countertops on the island in the CLOSET. Rly?), I do think that DETAIL matters. Good, robust millwork and lots of it. Appropriate use of waincoting if it's indicated. Solid, quality hardware. Solid core doors (and quite a few of them). Lots of appropriately sized windows ($$$). At that size, possibly a second "back stair". ($$$).

I'm not sure that I agree that "more square footage is cheap," because those economies of scale only get you so far. In my area, for instance, 4000 sq ft is the tipping point, beyond which an architect's stamp on the plans is required. That 3rd story area requires extra engineering to support it, etc., etc.

(OP, I am not trying to rub salt in, when I think you already have had the point driven home. Just elucidating the elements of the advice, for those who are following along at home. I wish you the best and hope you find a plan forward that works best for you and yours)

I am not attacking you personally, so much as pointing out the flaw in this reasoning ... That is what cash and near cash assets provide, real financial security.

Oh, I didn't feel personally attacked.

To be clear, I have not paid off my house at the expense of other savings. My modest paid-off house represents less than 5% of my total net worth. You don't need to worry about my financial security.

Obviously the house itself would be quite large ... We had heard that square footage is cheap and had hoped to build a big square box of a house (no fancy bump-outs or irregular shapes) and get the types of spaces we wanted without paying for all kinds of ultra-fancy finish work.

Ah, well, now we understand.

The phrase you want is "builder basic" ... and, no, it's still not cheap. A simple shape and a simple roofline will be less expensive, but never cheap. Beyond the obvious need for more materials and labor, a larger build will be more expensive because it'll require two staircases (upstairs and basement) and multiple heating zones with separate heat pumps, and wide open spaces often require the "invisible support" of beams in the ceiling. "Big" is not just tacking two "littles" together ... "big" comes with its own set of challenges.

Something to consider: You're talking about building something that's not typical. Such a house might be difficult to sell if /when you ever need to do so.

Last thoughts: Consider how you might combine some of these wants:

- A library and an office are an easy combination.

- Since fancy isn't your goal, could you arrange a garage that could -- occasionally -- work as a large dining space? Build closed storage for your garage-stuff and move the cars out. How about a covered porch?

- Could the family room (or the piano) be placed in the basement to save square footage?

- Look into The Not So Big House series. The author presents some good methods for combining spaces. I think it's her Liberty Hill house that has a particularly nice library space that converts to a dining room.

@ Storybook Home

First, that is quite a wall of text, you might try breaking it up a little bit to make it easier to read.

Look at 2008. Yes, that was a lot of people making ill advised financial choices, but life can be a real ball buster. Owning your house outright, at least you have a place to sleep.

This is simply not true at all and bears no actual resemblance to the truth. Realized real estate losses on property far outpaced realized equity losses. You can't eat your house and when people lost jobs equity was wiped out. Exponentially more real estate was sold at a loss to provide other financial relief than was foreclosed on for non-payment. Additionally, the financial markets recovered much faster and shielded against the credit freeze.

Plus, if you look at the actual cost of your house after interest... ewwww. And if your house is in an area seeing value gains, that plus the interest you’re saving, not too shabby.

This statement is clear sign you are out of your depth in this discussion. First, there is no marginal benefit from your house seeing value gains. Next, the effective interest should be about 3.4% assuming the OP is in a middle tax bracket, or about 2.9% in a high tax bracket. That would make the marginal rate of return on a really safe investment something like 2.5% (5% for the typical equity investment).

But let's skip really safe for ridiculously safe. If you took your house payoff money and invested it in treasury bonds you would have lost money every month. To be exact, you would have lost about $46 a month. That means the cost to have $1,000,000 in the bank would be about $46 per month. For $46 per month you would be protected from any uncertainty for which money was needed...

I can do this all day long, as an accounting and finance professor this isn't new territory for me, but instead let's just not do this again.

@ Storybrook Home

not sure why you feel the need to be so aggressive and rude as to calling other users ‘out of their depth’

Let me answer that question for you. As a financial professional I do a lot of volunteer work where I spend a lot of the time trying to help people dig out from underneath bad financial advice they trusted.

For a few weeks in the summer my days will be spent fixing the bad financial advice given by people with lots of confidence and no real understanding. Things like, "Don't refinance your high interest rate, you only have 10 years left to pay on your house and if you refinance you will have to pay 30 more years," or "Treasury bonds are safe and you are 30 so invest in those for retirement," or "houses are great investments," etc. The list goes on and on.

It wasn't my intention to be rude to you personally, but rather impress upon you that you were giving advice that you don't seem qualified to give. You said several things that were incorrect (about 12 things).

There is a real risk when you make a "common sense" post that implies you are experienced in this particular subject. That risk is that people will take your advice instead of seeking out qualified advice. This is distinctly different from the post made by Mrs Pete which doesn't mask itself as professional financial advice. She gives a social reason that I disagree with but understand.

bry911,

you give some dangerous advice!

first, past performance is no guarantee of future returns so telling someone to stay in debt based on past performance is dangerous and illegal.

also, if you are going to use returns to compare to a mortgage you should use a risk free rate. you did that but then down played the real cost of a mortgage today. not everyone itemizes. my spouse is an accountant and we have never not taken the standard deduction.

thirdly, why do you aside that people who are mortgage free are illiquid they are more likely to be liquid than those who have a mortgage. where do you think all the excess cash flow has gone that was being committed to debt? they've been banking all of that and can pay their doctor if and when needed.

IMO..... a LR is a 'complete' waste of space.....IF you are going to O/B you should save around 30% IF you get GC prices. That's not easy. But you 'have' to get this to save this amount. GC's make on average of 28-32% [profit" .

you give some dangerous advice!

First, I didn't give any advice. As I have said before financial advice is not one size fits all, if I were giving advice I would need more details. What I am doing is pointing out the flaw in what some posters have said.

also, if you are going to use returns to compare to a mortgage you should use a risk free rate.

No, because the mortgage isn't risk free. You only need use an investment with a risk profile matching a mortgage. However, as mentioned I did use the risk free rate.

you did that but then down played the real cost of a mortgage today. not everyone itemizes. my spouse is an accountant and we have never not taken the standard deduction.

I did not. I used today's rate, and a $1 million mortgage on a house that those in the know were ballparking to be over $1 million. I factored in the SALT limit and assumed the house was the only deduction. So what I calculated was the marginal benefit of this house and this mortgage as that is what some people were advising on.

I too am an accountant...

thirdly, why do you aside that people who are mortgage free are illiquid they are more likely to be liquid than those who have a mortgage.

I haven't assumed anything... I challenged the advice given by others, I didn't give any of my own. You can clearly see the quoted text I am responding to.

There's no one answer to the debt/no debt question. Everyone's situation is different determined by tangibles like budgets and monthly income and monthly expenses and the intangibles like what gives a person the best nights sleep.

bry911 I'm not going to argue with you but I've seen some of your posts that amount to stealth recommendations. be careful.

You can't eat your house and when people lost jobs equity was wiped out.

No, but when my husband was laid off, we were glad that our house was paid off ... it meant we could still meet our bills comfortably on my salary alone. We decreased our savings rate during that time, but we never had to dip into savings.

How does a job loss wipe out equity from one's house? Sounds like two separate issues.

The right answer is always BALANCE. Save an emergency fund, save for your kids' education, save for retirement, AND pay something extra on your house every month. Do a little of ALL these things, and I don't see how you can come up wrong.

If you took your house payoff money

Key word being "if". I suspect we're in agreement that the average American isn't saving enough today; I mean, we've all read the scary articles about a looming retirement crisis.

Things like, "Don't refinance your high interest rate, you only have 10 years left to pay on your house and if you refinance you will have to pay 30 more years," or "Treasury bonds are safe and you are 30 so invest in those for retirement," or "houses are great investments," etc. The list goes on and on

Sure, we've all heard that type of bad advice -- how about this one: Never pay off your house! You'll lose your tax break.

This is distinctly different from the post made by Mrs Pete which doesn't mask itself as professional financial advice. She gives a social reason that I disagree with but understand.

Not to be rude, but I couldn't care less whether anyone agrees or disagrees with my financial choices. If we were suddenly 20-something again and just married, my husband and I would do a few things differently ... but we'd manage our finances in the same way we have. I'm retiring (early) in roughly two years, and I'm pleased with what I've accomplished financially.

As for being an accountant, kudos to you -- that's a nice job. But my daddy was a CPA, and although he did well professionally, he could not manage his personal finances. Why? Because he had no willpower when it came to savings. He KNEW BETTER -- absolutely knew better -- but he didn't act on it.

And if we're talking about jobs, I'm an English teacher. As such, I feel obligated to point out the root of the word "mortgage" is "mort". Mort means death. Probably not applicable to this conversation, but an interesting side note.

thirdly, why do you aside that people who are mortgage free are illiquid they are more likely to be liquid than those who have a mortgage. where do you think all the excess cash flow has gone that was being committed to debt? they've been banking all of that and can pay their doctor if and when needed.

Well, I suspect the average American is spending it -- not that I recommend aiming for average.

$1 million mortgage on a house

I know prices vary wildly from place to place, but I'd recommend avoiding a million-dollar mortgage. You can live happily in a smaller house AND save the difference.

We had a similar original wishlist! We ended up cutting out the separate formal dining, study, and upstairs living area. We are at 3600 square feet. We have a foyer, large kitchen plus hearth room, large living room/ dining room combo, mud room downstairs, powder downstairs, 2nd master suite down stairs, main master upstairs (with all of the same elements you described plus a coffee bar), two good size bedrooms upstairs plus a bath. We also have porches on 3 sides of the house, plus a porch off the master upstairs. I also have parents who live in a lovely 4,000 sq ft house, whom we based room sizes off of. No basement. Having gone through the process of parring down on square feet, I’d estimate that your list would put you easily around 5,000 square feet. The current price per square foot in our area for a custom home with moderate touches is $165-$200 square foot (Texas).

Many people have a bias that affects their view of financial information and decisions. So they introduce externalities into decisions and discussions that shouldn't be introduced.

The simple financial fact is that a house is a risk asset, and today the asset risk on a home is higher than the interest rate on home loans.

This doesn't mean that was true in 2007, or it was true for your father, or any other time in history. But right now houses have inherently more risk than notes on those houses.

There is currently no financial situation where a person with good credit buying a house appropriate for their budget will increase financial security from paying it off, that is without regard to their current liquidity. The underlying asset is more risky than the loan on it. Period.

This isn't to say there isn't a non-financial reason. There are many specific situations that may make a mortgage less desirable. However, those are not financial reasons. Being bad with money requires a specific plan to fix that, rather than just blanket statements or right and wrong.

----

Mrs. Pete, your argument is non sequitur. You have noted your father wasn't very good with money, but failed to note how that relates to this discussion. This is largely a binary position either you have one asset worth $1 million and no debt or you have $2 million in diversified assets and $1 million in debt. Your father is only relevant if he achieved one of these two binary positions. Of course, more equity is better than less equity, so choosing between a paid off house and a Reese's Cup, choose the paid off house. However, holding equity constant and choosing between two liquidity and risk positions is different.

As an English teacher I am sure you are aware that a note is the loan on a home and not the mortgage. The mortgage is the position on the title. Thus dead pledge aptly describes the owner's secondary title position.

There is currently no financial situation where a person with good credit buying a house appropriate for their budget will increase financial security from paying it off, that is without regard to their current liquidity.

Yet, as you have stated, financial security is not the be-all, end-all statement in this topic. And I'll say again, my paid-for house represents less than 5% of my total assets. I don't think I'm in any danger because of the money that's tied up in my bricks and mortar.

Here's another example of a person whose finances are solid but who feels much more comfortable with a paid-for house:

I have an uncle who is quite wealthy. His only son is, well, a screw-up: high school drop out, drug problem, criminal record, four kids. We're all pleased that he's managing to work part time now. In his defense, he isn't quite "all there". His father helps him financially.

My uncle is in his 70s and is concerned about what'll happen upon his death. He made me executor of his will, and he has given me strict instructions about how he wants his money (eventually his son's money) to be managed. The father bought the son a house about a decade ago, and he has told me that I am authorized to sell that house /buy another if I deem it appropriate ... but my #1 financial priority is always that the son /his kids will have a house in which to live.

The son would not manage his father's money well -- he would have a couple fantastic years, then be homeless. My uncle's instructions make perfect sense to me.

Mrs. Pete, your argument is non sequitur. You have noted your father wasn't very good with money, but failed to note how that relates to this discussion.

Okay, I suppose I didn't connect the dots. You're presenting yourself as knowledgeable on the topic of personal finance because you're an accountant. I pointed out that my father was a CPA, yet he couldn't manage his own personal money.

This is largely a binary position either you have one asset worth $1 million and no debt or you have $2 million in diversified assets and $1 million in debt.

Disagree. This hypothetical person could have 1.5 million invested in the house /$500,000 in other assets ... he could have $500,000 invested in the house /1.5 million invested in other assets ... or any other number in between.

As an English teacher I am sure you are aware that a note is the loan on a home and not the mortgage. The mortgage is the position on the title. Thus dead pledge aptly describes the owner's secondary title position.

As long as you have to pay it every month, I'll stick to the idea that "death" is a part of the name.

financial security is not the be-all, end-all statement in this topic. And I'll say again, my paid-for house represents less than 5% of my total assets.

First, it doesn't matter. There is no financial position where asset risk exceeds loan interest in which having a paid off asset is beneficial. Whether it is 100% of your assets or 1% is irrelevant.

Furthermore, your original statement was, "having grown up without financial stability, I can't tell you what a difference it makes to me to know that each and every brick of my house is MINE - MINE - MINE - MINE - MINE."

So which is it, does a paid off house represent financial stability or not? Because, again, I strongly suspect you have simply decided what your bias is and are simply refusing any other information.

The son would not manage his father's money well -- he would have a couple fantastic years, then be homeless. My uncle's instructions make perfect sense to me.

Your entire story is irrelevant, I have set up many similar arrangements in cities where property ownership is not a viable option and it works just fine with other investment vehicles.

Furthermore, you are again introducing externalities to improve your position. So as I have said before that one size fits all financial advice is wrong, but how in the world is that relevant to whether or not a paid off house increases or decreases financial risk?

You're presenting yourself as knowledgeable on the topic of personal finance because you're an accountant. I pointed out that my father was a CPA, yet he couldn't manage his own personal money.

First, I did no such thing. Someone noted that their wife was an accountant and that not everyone itemizes in which I detailed the steps I took to calculate the minimum marginal itemization and pointed out that I too was an accountant, implying that is why I knew how to properly calculate the marginal benefit of a specific interest rate.

Next, it is still a logical fallacy. A football coach need not be able to quarterback the Super Bowl to understand the things required of his quarterback. Your father's inability to follow his own advice doesn't make his advice wrong.

This hypothetical person could have 1.5 million invested in the house /$500,000 in other assets ... he could have $500,000 invested in the house /1.5 million invested in other assets ... or any other number in between.

See the first answer above, but you are partially correct. This decision is always binary, but the binary positions of the decision change as default risk decreases.

Essentially, it is a bad idea if you have no liquidity and it becomes a worse idea as your liquidity grows, at every additional dollar of liquidity having a paid off home is worse than it was at every previous dollar of liquidity.

Bry,
how do you come to the conclusion that the asset risk on a house is less than the loan interest. please explain

And I'll say again, my paid-for house represents less than 5% of my total assets.

Unless you're in a shed that is impressive!

So which is it, does a paid off house represent financial stability or not?

Yes, it is a part of financial stability, AND it makes 11-year old me who was always afraid about my parents' lack of money feel comfortable.

I know you solidly believe your argument, but I am not at all moved -- call it bias, if you wish, but it's a topic my husband and I considered at length before the house was paid off. We considered the math at that point, and our thoughts have not changed.

So as I have said before that one size fits all financial advice is wrong, but how in the world is that relevant to whether or not a paid off house increases or decreases financial risk?

I agree that no financial advice -- well, maybe few pieces of financial advice -- are one-size-fits all. I'm defending the pay-it-off viewpoint.

Your father's inability to follow his own advice doesn't make his advice wrong.

Kinda missing the point there, but it's all good.

Unless you're in a shed that is impressive!

In truth, it's a little of both. I live in a low cost of living area, and my house is what you'd probably term "working class". But we're a two-professional household who's been saving aggressively and are nearing (early) retirement.

Back to the OP - sorry, but I have to ask - the 10’ basement ceilings, why? You also said “have no desire for the vaulted ceilings, granite countertops, marble flooring, etc., that you normally find in large homes”. How do the 10’ basement ceilings jibe with that statement, and, why do you want them?

Agree with the others that your list in your OP equates to a $1.5 million home. I assume you’ve thought about hiring an architect? You wouldn’t want to try to design this house on your own.

Matthew, I did a quick tabulation of all of the spaces that you listed, making some assumptions on room size based on your descriptions and program requirements. I came up with 3700 sf of programmed space. Once you add in structure (wall thickness), stairs, closets, additional required circulation space and such you will likely find yourself much closer to 5000 square feet as Erin stated above.

For comparison, our 3100 sf house only accommodates:

-living room for 12 (17'x25')

-family room for 7-8 (13'x21')

-dining room comfortably seating 10 (17'x15')

-modest kitchen (10'x17') and breakfast nook (8'x9')

-generous foyer and (12'x20' including stair and half bath)

-back entrance (6'x10')

-one smallish and one larger secondary bedroom (9'x17' and 12'x17')

-hall bath (7'x8')

-master suite (17'x28' total including closet, bath, and bedroom)

laundry is in the basement so I'm not counting that toward square footage. With an additional 900 sf we might be able to fit in your third bedroom, office, library, and laundry, but that size still wouldn't accommodate your supersized living room and dining room, larger eat-in kitchen, upstairs living area, or additional master suite requirements.

As far as how much you need to save: about 15 years ago in small town Michigan I knew a production builder who was achieving small (1500-2000sf) economy houses at just over $100 per square foot including the cheap land prices. Assuming with inflation, and the size of your house and rooms (which will require more expensive structural solutions, roof, foundation, etc), the cheapest build you can likely hope to achieve for a GC and builder grade finishes will be $150 per square foot with a sensible range being $150-$200. This leads to an assumed minimum saving goal of $750,000-$1 million. Again all of this is only assumptions not knowing your local economic factors, but it gives a ballpark to go by for a very minimal budget. If this isn't feasible then you will have to go back and look at your space requirements and see where you can combine and cut back.

The other way to look at this problem, is see what you can feasibly save in you goal time period, or how much you can afford with financing then work backward to see how much house you can afford to build.

We are in the PNW, a more rural area. Friends with a large family are putting up a 6000 sq ft house (including the unfinished basement). Also including the unfinished basement, they are coming in at $100/sq ft, with fairly low-end finsihes. This does not include the price to purchase their property or the amount to put in driveway, sceptic, and well. Like what A Fox said, around here the house you describe would be between 750 and a million dollars, depending on what you ended up choosing design-wise.

OP - I really think you need to sit down and rethink your position. You have a lot of ideas swirling around, but they're not well defined or mutually consistent.

First, you need to define much more concretely what kind of house you really want - you say simple, unpretentious, but then mention 10 foot ceilings in the basement, multiple living/family rooms and perhaps even a cupola. You don't need separate rooms for every function, which is what your wish list kind of comes across as: you might want to consider re-doing your "needs" and "wants" not in terms of rooms required but in terms of the functions you want your house as a whole to perform. Rooms that can do double duty would save you square footage and money.

Second, as I mentioned previously, you need to get a handle on housing costs where you live. That may mean going to open houses, surfing Zillow, talking to local agents or having a sit down with a contractor or architect.

Third, I think you should put aside the idea of paying for the house in cash. While I'm all in favor of getting rid of that mortgage asap for many of the reasons outlined by Mrs Pete (you cannot put a dollar value on the feeling of security you get if you grew up in a less than secure housing environment, but finally pay off your own home), nonetheless it makes a lot of sense to have a low-interest mortgage and put your cash into higher-return investments, especially if you're more or less "starting out."

Fourth, you need to think about your personal financials, particularly once you have a better idea of what your housing costs are likely to be. When I bought my first house, I took out a mortgage that was about half of what the bank approved, because I knew I could pay that amount without having to chip into my contingency fund (at the time, 3 months salary) and while still contributing to my retirement fund and my regular investment fund. So, I bought a smaller, simpler place than my bank would have allowed, simply because it suited my long term financial goals better. I'm much older now, have built up a decent portfolio, as has my better half, so we did pay cash outright for our last house - but again, we built a house that was less than we could afford, but allowed us to leave savings and retirement funds intact (we did have to sell one investment property as well as our old home to make it happen, but that was no great sacrifice!)

People talk a lot about dream houses, but sometimes a dream house isn't all marble floors and a backyard swimming pool or 5000 sq feet of space. Sometimes it's living comfortably and affordably in a good area, and enjoying a retirement that allows you to enjoy life, restaurants, travel, and friends. The dream life is more important to me than the dream house.

We are in rural Missouri and for middle of the road finishes (Step up from basic contractor) we were bid $160/finished sq ft. That was just from the contractor that doesn't include designing, land etc... So $160 * 4000 sq ft = $640,000 (for your house). Our house has very few corners, no formal dining or living room and no cupola we are around 2200 sq ft. I would think you will be spending 1 million. We are cash flowing our house too; good luck!