Construction Loanz
Construction Loanz

Yes, higher risk loans require a higher interest rate.

I am going to buy a fixer upper and want to customize the house as per my specific needs.

How do i obtain financing for the remodeling since I will have only 10% equity (which is the downpayment) in the house?

Does the remodeling company offer financing?
Can i get a loan from the mortgage company itself to remodel the house? I don't have equity in the house so if there is a provision to do something like this then can someone please explain it to me

Thanks

Have you already bought the house and get the mortgage yet ?

Before the financial melt down, this is how it go down.

Get a house with first mortgage with what ever down payment you have.
Obtain a second mortgage to withdraw your equity. Sometime the loan originator and homeowner and home appraiser / inspector or valuator will conspire to inflate the house value so the home owner can get 2nd mortgage that is beyond their equity.

Don't know if any bank will still play that game
Simply put the game is
1st mortgage for the value of house - the 10% down payment you put down
2nd mortgage for the 10 % equity (from your down payment)
thus 100 % financing.

or if you have good job . good credit . you might be able to get a signature loan. and do the remodeling.
then
Get another appraisal and a different mortgage loan to cover the newly remodeled house ( the value has just gone up because you remodeled it )

But you can also
just get the 1st mortgage and live in that house and take one project at a time. without taking out a big loan.
Maybe in a year or two you will be done .

Good Luck

My brother wants to get a construction loan to build his own house.

he has the land picked out and a purchase aggrement from the land owner and his boss (a builder) is going to sign off as the builder for the loan.

He has his blue prints and his cost estimate ready.

My ? is what else do we need? before we go to the bank?
does anyone know of a bank that does construction loans with the purchase of the land too!

Any advice/help would be Great!!!

First the bank, whoever you go with is going to want to see you bring someting to the table. Depending on his credit scores and income will be a determining factor in what down payment they want to see.

2nd- If he owns a home now, he does not have to sell it before beginning construction. There are loans available that you basically do not make a payment on the loan until the construction is complete and the loan is converted to your long term financing. We actually have a lender that does a 3 n 1. Aqcuisition for the land, $ for the construction & then converts to permanent financing upon completion.

3rd-as long as you have someone experienced on your team, it can be an owner builder project.

If you have any additional question you can visit our construction loan Q&A - it covers length of time, etc.

www.aimwithfocus.com/construction_loan.html

We are getting ready to get a construction loan but we need to know if we put money down on just the loan or when we get the regular loan?
First of all. To all the meanies out there. I'm not getting the loan tomorrow. I think that this is a fair question. When I say we are getting ready it means we have land and that we are collecting data to get a construction.
So kiss my ….

the mortgage company i used to work for has a 10% (of the value of the land and structure combined) minimum down payment from borrowers needing a contruction to permanent loan. if you already own the land free and clear the value of that parcel will be considered in the 10%. but if the builder is financing the construction, the regular down payment guidelines will apply.

We use home improvement loans because they were created to help us make improvements on our homes that we couldn’t otherwise afford. These loans can be used for things like adding an extra room, putting in a pool for our family in the summer, re-doing a kitchen or bathroom, or even replacing old carpet with new.

These are secured loans, which means that collateral is required which is usually based on the current equity in the home. In order to qualify for tax deductions, the improvements must be on the your primary residence, not on second homes, rental or vacation property.

Interest rates on your home improvement loan is usually lower than other secured loans since it is deemed as less risky and tends to improve the borrower’s home. You must own your home or be financing your home to be qualified for a home improvement loan.

These loans are intended to help you the borrower add additional features to your home. The most popular home improvement is kitchen and bathroom remodeling, however other things such as installation of a new roof, adding a garage, or installing a pool are other frequently done improvements. The two most common types of home improvement loans available are; FHA Title I Home Improvement Loans and Traditional Home Improvement Loans

With both, you must either own or be in the process of buying the home since it’s going to be used as collateral for the loan. When going for the Traditional loan you must have considerable equity in your home, usually upwards 20%. Your current equity in the home, as well as that created by the improvements, is your collateral. The lender then secures the loan taking a first or second lien.

Usually, home improvement loans are allocated for ten years or less, however some lenders may have programs that will allow for up to 15 years, depending on how much money is borrowed. Just like mortgages, interest paid on your loan is tax deductible. The Interest rate on home improvement loans is frequently considerably lower than personal loans because lenders consider those very risky.

An FHA Title I Loan is a U.S. Government program that helps you improve or rehabilitate your home much like a conventional home improvement loan.

This program is obtainable through various lenders, commonly banks. Some types of luxury improvements such as swimming pools and barbecue pits aren’t allowed under this loan. With Title I loans, you aren’t required to have any equity in your home for collateral. The loan period can be up to 20 years and you can have some past credit problems, providing you’ve shown recent acceptable credit.

On loan requests below $7,500, the lender will not take a lien on the home. The requirements are less severe than conventional home improvement loans and make it easier for a greater number of home owners to partake. As an added bonus, the interest paid is tax deductible.

Greg K. Hansward
http://www.articlesbase.com/finance-articles/how-to-obtain-a-loan-to-fix-your-home-106723.html

A secured loan is essentially a loan that is taken out against your home or other collateral. In the context of this guide, when talking about secured loans and secured lending, reference is being made to that of a lender placing a legal charge over a property.

The most common type of secured loan is that of a mortgage. It is not within the financial capability of most people to purchase a property outright so most of us will therefore need to secure a mortgage.

Again, in the context of this guide, when talking about secured loans and secured lending, reference is being made to secondary secured loans, or second charges as they are commonly known within the industry. Borrowers who apply for a secured loan/second charge are doing so to follow that of their first mortgage.

How Do Secured Loans Work?

To the average lender, secured loans offer a very appealing prospect. They are able to lend out large sums of money with the additional security of a property - They will subsequently have open to them a number of legal remedies in the event of the borrower defaulting there obligations and payments. This will of course include home repossession.

A lender will register a secured loan by way of a legal charge with which the applicant must give consent to in order for an application to complete. The charge is then registered at the Land Registry by the lenders solicitors.

When it comes to remortgaging, most secured lenders will require the outstanding balance to be redeemed at the same time as the first mortgage. An exception to this is when a second charge lender grants a deed of postponement, thus allowing the existing second charge loan to run alongside that of the new mortgage lender.

What Are The Characteristics Of A Secured Loan?

The characteristics of a secured loan share many similarities to that of a mortgage. The most common one being that if your do not keep up the repayments on the secured loan, your home may be repossessed.

In the case of taking out a secured loan, it is a common myth that your home will be safe so long as you meet the repayments on your first mortgage. This is not true. If you fail to meet the repayments on your secured loan, even if you are up to date on your mortgage, the lender can seek possession of your property through the courts.

Secured loans can be arranged on loan sizes that usually range from 5,000 to 250,000, depending on the lender. Flexible terms are also available on secured lending, ranging from 5 up to 30 years. Some lenders will have schemes available allowing you to borrow more than the value of your property (combined with that of your first mortgage) of up to 125%. These schemes are not too common and it is believed that this is more of a marketing ploy rather than a viable or an advisable option to many borrowers.

How Does A Debt Consolidation Secured Loan Work?

A debt consolidation secured loan enables borrowers with significant levels of debt to consolidate some or all of these outstanding commitments into one loan amount and subsequently, one monthly payment. Debt consolidation is seen by many as an extremely effective short term solution to relieving the pressures of debt.

It is highly likely that by arranging a secured loan to clear off other unsecured debts such as credit cards, personal loans and hire purchases, the borrower is able to achieve a lower rate of interest than that applied to their unsecured commitments.

Not only will this take the effect of reducing the monthly payments but also secured loans can be arranged over a longer term than that of their unsecured counterparts. By extending the term of the loan will also mean that lower monthly payments can be achieved.

This is often viewed as a short term solution as in the long term, increasing the term of the debts may mean that you end up paying more interest. The other potential disadvantage of these types of loans is that consolidated debts that were once unsecured would then transform to being secured on the property.

What Are The Benefits Of A Secured Loan?

There are many benefits to be realised in taking out a secured loan. Many lenders and brokers alike will not charge any upfront fees, house valuation costs or legal fees. Compared to the fees associated with a remortgage, the secured loan option can be a very appealing one to borrowers.

Such fees associated with a remortgage will include valuation and administration fees, higher lending charges, discharge fees, title insurance and telegraphic transfer fees. This list is by no means exhaustive however they may not all be applicable in every case.

The timescales involved along with the various fees involved can be a put off for some homeowners considering a remortgage.

Perhaps the biggest appeal to most homeowners who are seeking finance is the speed at which a secured loan application can complete. At the top end of the scale, an application can take just a matter of days to complete. However for the majority, two to three weeks is a sensible timeframe to look for.

The benefits of secured loans when looked at against comparable unsecured loans are that it is highly likely that you will obtain a more favourable rate of interest on secured lending. As discussed earlier, this is due to the fact that the lender will in this case secure the loan by legal charge over the property reducing their perceived level of risk and subsequently reducing the rate of interest.

A secured loan will also offer a more flexible repayment period than that of an unsecured loan between 5 and 30 years with many lenders. If it is the intention of the borrower to obtain the very lowest monthly payment then this could be large benefit to them.

How Do I Know Whether I Should Take Out A Remortgage Or Secured Loan?

Each case must be assessed on its own merits. It is impossible to answer this question without careful consideration and assessment of the borrowers circumstances, needs and objectives.

The obvious example would be where a borrower seeking finance has a large early repayment charge to redeem their mortgage. In this case it may not be appropriate to remortgage. ERCs (Early repayment charges) can be as high as 7% of the outstanding mortgage balance which can of course result in thousands of pounds.

By arranging a secured loan in this instance might mean that you would be paying a slightly higher rate than that of the mortgage, however it could potentially save thousands of pounds of charges.

Another example of when taking out a secured loan might be of more benefit to the borrower would be a case where the first mortgage was originally taken out before the individual started to miss payments or run up another form of bad credit. It is highly likely in this instance that raising finance through a remortgage would mean paying a higher non-conforming/sub prime rate on the entire amount of borrowing.

By arranging a secured loan might mean that the borrower can still enjoy the prime high street rate applied to the first mortgage whilst only paying a higher non-conforming/sub prime rate on the new secured loan the additional finance.

Can I Apply For A Secured Loan With A Bad Credit History?

There are many schemes available today to cater for nearly every type of borrower regardless of credit history. If there is available equity in your property and you can meet the affordability criteria then it is highly like that you will be eligible for a secured loan. Bad credit will usually be defined between having one or more of the following:

# Mortgage arrears
# Rental arrears
# Secured loan arrears
# County Court Judgements
# Individual voluntary arrangements
# Bankruptcy

The more severe your credit history then the higher the interest rate that you will be charged. This again is a reflection of the higher level of risk perceived by the lender.

James Copper
http://www.articlesbase.com/finance-articles/secured-loans-primer-107725.html

When a loan is secured by real estate collateral, it is known as a real estate loan or more commonly a mortgage. Investors prize this form of real estate because it gives them an opportunity to bring in cash. Real estate investment loans dont just come from banks and loan agencies. They can also be found via mortgage bankers, pension funds, finance lenders, and insurance companies. Investors can even secure these loans via private individuals.

The different types of real estate investment loans serve different purposes. With a residential loan, the property is only used for commercial purposes. Stores, warehouses, and commercial businesses fall into this category. Residential loans, on the other hand, can only be used for residential real estate purposes. These can also include loans used for rental income. When an investor gets this type of loan, he or she usually receives a one-time lump sum payment from the lender. This sum is paid back in installments.

Since purchasing a residential property involves having a great deal of money, a person has to undergo a thorough screening process to be approved. Many factors contribute to the lenders decision. These include the borrowers income, their credit score, and their debt/income ratio. The interest rate on the loan depends on all of these factors.

Consisting of short term loans, long term loans, and interim loans, real estate investment loans come in many varieties. There are also other options like equity financing, construction debt, permanent debt, interim financing, structured financing, mezzanine financing, foreclosure investor money, residential repair funding, and hard money loans.

Investors with less than perfect credit should not lose hope. Loans such as bad credit real estate loans are specifically formulated for individuals with tainted credit reports. Although it is a higher risk to the lender, it allows individuals to obtain a mortgage from a company when more traditional companies might decline the loan.

Interest rates are often based on how long your repayment terms last. If you have a twenty year loan, the interest rate will be higher than a five year loan. Talking frankly and openly with a loan rep will help you understand all the intricacies of the process.

Depending on the investor, many people prefer options like buying shares in a Real Estate Investment Trust (REIT). These can be used as collateral to fund investment loans.

Kris Koonar
http://www.articlesbase.com/investing-articles/what-are-real-estate-investment-loans-64831.html

There are two major sources of mortgage financing.

(1)Primary Mortgage Markets- where mortgage loans are originated. It is made up of

(A) Institutional lender- which are Insurance companies, Savings and Loans (Savings bank) and Commercial Banks. They receive most of their deposits from “Household Savings” (Savings of individual depositors)

(i) Insurance Companies-They prefer long terms loans on existing commercial property such as shopping center loans. Mortgage bankers (Loan Correcpondents) usallu negotiate and service their loans.

(ii) Savings and Loan Association(Savings Banks)– Savings and Loanhave the greatest percentage of their asset in real estate loans. This is main source of 1-4 family unit home loans.

(iii) Commercial Bank-Commercial banks prefer short term loans and they are the primary source of construction financing.

(B) Non-Institutional lenders.-Which basically represents Private lender and Mortgage Companies such as Mortgage Bankers and Mortgage Loan correspondents.

(i) Private Lenders-This is major source of Junior loans. Junior loans are second, third and fourth loans.

(ii) Mortgage Companies such as Mortgage Bankers and Mortgage Loan correspondents-They are licensed by Department of Real Estate or by Departmentr of Corporations as Residential Mortgage lenders or California Finance Lenders. They originate conventional loans.

(2)Secondary Mortgage Market- This is resale market place for loans, where existing loans are bought and sold. The participant in the secondary mortgage market have increased the amount of housing credit available to the economy. The major participants in the secondary mortgage market are

(A)Federal National Mortgage Association ( Fannie Mae) - Originally a government agency, it is now a corporation with shares traded on New York Stock Exchange. It was created for the purpose of increasing the amount of housing credit available to the economy. It is concerned primarily with the development of the secondary mortgage market for conventional , FHA, and VA loans originated in the primary mortgage market.

(B)Government National Mortgage Association (Ginnie Mae)-A federal agency within the Deparment of Housing and Urban Development (HUD)

(C)Federal Home Loan Mortgage Corporation ( Freddie Mac) - Works with Fannie Mae and Ginnie Mae to Increase the availability of mortgage money and maintain the secondary market for residential mortgages.

Real Estate Pros
http://www.articlesbase.com/real-estate-articles/who-really-funds-home-loan-121696.html

McCain Sr was in WW1. Jr was in WW2 will McCain 3 bring World War 3?

If this is too far fetched for you to believe then you can read his book or read the Rolling Stones Article: Make-Believe Maverick

at the following link:

http://www.rollingstone.com/news/coverstory/make_believe_maverick_the_real_john_mccain

OR

http://www.rollingstone.com/news/coverstory/make_believe_maverick_the

Dedicated to my die heart Republican friends.
I hope your eyes are opened.
McCain Votes 90% like Bush, if it was a paternity test he would be Bush’s dad.

Lies about Obama

Lies about everything

Loves WAR and will probably start to WWIII

Will tax benefits from health insurance benefits to ???

Born in Panama canal - Not natural born citizen

Graduated 5th from the bottom

Clueless about the economy and education

McCain was twice chairman of the Senate Indian Affairs Committee. He is the main politician for Indian Gaming. Which only helped a handful of tribes. Other tribes like the Sioux and Navajo (which are the largest land and MINERAL RICH Reservations) are worse off. The Lakota have the most counties listed in the poorest counties of America. He is against hemp crops and other self sustaining industries BUT for CASINOs. One way to get the land is to sell both tribes on Casinos. Strategy: Look how good the RICH tribes are doing (very little land close to large cities). Take out loans and use your land as collateral and build your own casino. These casinos become money pits for these tribes. BUT guess what, if they fail they lose their land. Sounds like the mortgage scandal. “We were just trying to help them”. They want the land, and couldn’t get it by war, so they are using funny money. The Fed money isn’t backed by gold anymore. You have a house, you bought up or used an equity loan, now you lost your house. This gets people mad. No one likes to be stolen from. Russell Means is trying to declare independence and I am sure others will follow. United we stand, divided we fall. Get rid of politicians like McCAIN Bush Cheney Paulson Pickens

If they didn’t get your land though the mortgage crisis, then Pickens will get your land (mineral rights) using politicians to force you off your land using eminent domain. Subscribe to my channel so you can be notified when I finish the Pickens video. The bible belt will be taken - you are forewarned.

Wrecked 3 planes

Left POWs in Vietnam - Vets against McCain

What happened in Vietnam stays in vietnam

Comrades would not vote for him

Not a true Warrior

Cheated on wife and left her & married Cindy

Talk that he cheats on Cindy too

Cheated on America and sold Budweiser to Belgium

Ethics Scandal and part of the Keating Five gang - Worse ethics scandal in Senate. He was very instrumental in getting his party to vote for the Bank Mortgage Bailout. The mortgage bailout will be shown to surpass the Saving & Loan scandal.

Not in touch with Americans

Poor Health & history of Cancer

Rude, Angry & hot tempered

Unqualified Vice President

VP - kills animals and gives tax payers dollars for animal
skins & pieces

Palin will be in charge of finding pork barrel spending in Gov. FYI there are two bridges to nowhere. The billion dollar bridge to nowhere is being built in her hometown Wasilla, AK. Billion $$$ pork barrel spending: bridge that would benefit Wasilla, known as the Knik Arm Bridge.

Anti women - crude jokes - doesn’t listen

May have: Stockholm syndrome where the hostage shows
signs of loyalty to the hostage-taker

Adulterer, McCain & Palin not a good couple

There are two bridges to nowhere in Alaska - only 1 was
canceled.

Celebrated his birthday with Bush when people were dying in Katrina

Clueless about bailout, supports it and it will fail

So rich, he has 12 million dollar houses and can’t even keep
track of them

Do not be distracted –

IF YOU ARE WERE BETTER OFF 8 YEARS AGO
VOTE OBAMA

Edited by Lance Brown Eyes

Associate Lucas Brown Eyes

Lakota Brown Eyes

From: Pine Ridge, South Dakota
going to school in California

Duration : 0:16:56

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Quick Manual of how and what a 203k Renovation loan is.

Duration : 0:3:40

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