If you have always dreamed of building and living in the home
you’ve helped design, it’s time to seriously consider putting
your dream into action. In today’s mortgage market, a specially
designed loan for just such a homeowner, the construction to
perm loan, includes the construction loan to build the house,
and the permanent loan to purchase the home. Mortgage lenders
used to offer this as a two part process, first financing the
construction loan and building the house, then obtaining another
mortgage to purchase the home. There were two closings, and two
sets of closing costs with this type of loan. The
construction-to-permanent loan allows for one application
process, one closing, and one set of closing costs and is
simpler, cost-effective, and less stressful for the applicant.
Some construction to perm loans allow custom building of a home
with an adjustable low payment during the construction process.
For those who may have purchased a piece of land, or intend to
buy a piece of land then build on it, this informational article
will show you how to finance the custom built home before it’s
built. When choosing a lender and a builder, take the time to
find viable partners in your custom building project who share
your vision for your dream.
Lots for Building Custom Homes It is often best to select a
finished lot. This means the lot is equipped with water and
sewage systems, electricity, and road access. The lot should
also be recognized as a single piece of land and have a boundary
designation recorded with the county or city.
Finance Your Custom Built Home with a Mortgage Broker Breakwater
Mortgage, in Virginia Beach and Williamsburg Virginia, is a
Mortgage Broker. Mortgage Brokers have a wider variety of loan
programs for consumers to select from. Visit a mortgage broker
for the most competitive deals on a construction to perm loan.
The lender will want to investigate if the land is appropriate
for building by reviewing the land survey and building plans
first. They will also check to see if the contractor is on the
approved list of builders. If not, the selected builder will
have to submit an application to become one.
Select the Builder of Choice for Your Custom Built Home Many of
the larger name builders are already approved for many lenders.
Ask the lender if your builder is approved. If not, most private
builders and architects can easily apply through lenders. Each
lender has different criteria for builders. If the homeowner is
not satisfied with the builder they have selected, many loan
programs allow them to fire the builder and begin with another
approved builder. This gives the homebuyer power over their own
destiny during the custom building and construction process.
Consumer Highlights for Construction to Perm Loans Construction
to Perm Mortgages are written for primary and secondary homes.
They are not allowed for investment property. Construction to
Perm mortgages are not written for modular, pre-fabricated, or
manufactured homes, either. One unit is allowed per mortgage.
The construction term of the loan is from six months to 12
months, with exceptions up to 18 months on some products. Ask
your mortgage loan officer about subordinate financing. There
are also creative financing options available for homebuyers who
want to put the minimum down and pay a low interest only payment
while the house is being custom built.
Lender Requirements for Construction to Perm Financing Lenders
require standard credit documentation and high credit scores for
construction to perm financing. Lenders also request: 1. Final
plans and specifications (needed to obtain appraisal) 2.
Purchase contract for lot (or settlement statement if already
purchased) 3. Property profile (a description of materials for
custom building). 4. Line item cost breakdown from the builder
5. The builder’s construction contract 6. A copy of the
builder’s license 7. The builder’s statement or application
(showing the company as approved or applying to be approved to
build a home). In addition to these documents, it is essential
that the homeowner obtain the necessary permits to build in the
community.
Benefits of Construction to Perm Financing Construction to Perm
loans are a single close loan, and the consumer obtains
financing before construction. This gives the homeowner cash to
pay the builder and complete the construction. Construction to
Perm is a fully amortized loan. Nothing changes in the term -
it’s one mortgage. One of the greatest advantages to the
homebuyer with this type of home financing is some lenders allow
interest only payments while the home is under construction.
This gives the homebuyer a low payment option in the beginning
while living somewhere else. Once the home is occupied, the
mortgage payments are changed to principal and interest payments.
Financial Suitability for Custom Built Homes High credit scores
are important to lenders for construction to perm mortgages.
Liquid assets are also carefully scrutinized. For homebuyers
interested in construction to perm financing, the lender will
look for adequate savings to pay for the mortgage during the
construction period of the loan.
Down Payment Expect a 3-10% down payment to be required,
depending upon the loan amount for the construction to perm
financing. Smaller pieces of land or smaller loan amounts will
require a lower down payment.
From the vantage point of the loan officer, construction to
perm loans are a win-win situation. The homebuyer is purchasing
a loan they feel comfortable with. They have a reasonable
payment during construction, and business with the lender is
concluded at the time the loan is made. This type of loan allows
the person building their custom dream home to take control over
their biggest asset during the most critical phase:
construction. With financing in place, the borrower can make
sure the final product is exactly what they want it to be.
Dan Wood And Sherry Guard
http://www.articlesbase.com/finance-articles/how-to-finance-and-build-your-dream-home-1351.html
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friends4tenyears · March 18, 2010 at 12:56 am
Gambling problem with Mom and no one sees it?
My Mom is at retirement age. They built their dream home a few years ago, despite my advice that entering your twilight years you want to be debt free. Now all of a sudden the house is on the market. A real estate sign is in the front yard and they never even told me.
My Dad has gone back to work at a job that hardly pays anything, after 35 years of working for a pension. My Mom can’t seem to be found during the day. We try calling her and even driving around looking for her. She always says she was at Wal-mart or the grocery. She has even lied and said that she was with me when she was not. We believe that she is going to the casino.
I was visiting her a couple of weeks ago and every time the phone would ring she would lift the receiver and just hang up (without ever breaking eye contact with me). I finally asked her what she was doing and she said that it was just "telemarketers" and not to worry.
She is always unavailable during the first 10 days of the month because that is when their pension check and ss checks come in. Near the end of the month she seems very stressed and claims that she doesn’t even have money for gas.
Now, keep in mind, this is a couple that says they need to sell their home because they feel "strapped". They have over $7K per month coming in and live in a $400K custom built home and they have nothing. She can’t seem to get her bills paid on time, or she only pays half complaining that the electric company "overcharged" them. My borther and I have both sat her down to talk to her, but she refuses to talk with us about finances.
They need our help to do projects around their house to get it ready to sell, but they refuse to pay someone to do it. Instead, she takes the money and goes to the casino and calls us to help around the house. She then gets angry when we tell her she is no different than we are to hire someone to get things done.
I guess I am lost. What should I do? How should I approach this with her? They want to sell their house, but can’t give a reason. I am afraid when they do sell any equity they receive at closing will go right to the casino. They have no plans where they are going to live or anything. I love my parents, but I am not going to let them blow their lives apart and then move into my home.
Can somebody give me some ideas on what I should do?
Thanks.
FYI. My Dad protects her and does not think she has a problem. We have talked with him, but he says it is their business.
fah-q – What a great answer! That is exactly what I am trying to do. I want them to save all of "nothing" that they have so that I can have..nothing! You are such an idiot. I don’t want them to end up in bankruptcy or foreclosure or completely destitute. They have worked their whole lives only to be throwing it away on an additiction and you, with your wonderful wisdom enlighten me and open my eyes to the fact the I am a "gold digger". Obviously you have never worked for anything in your life since you can’t understand my concern. You shouldn’t be wasting peoples time here, but instead looking at your own life.
fah-q · March 18, 2010 at 5:58 am
if she would simply be responsible, pay the mortgage and put together a nest egg so much more for you to inherit…..seems like you want to make money the old fashion way…..have mommy and daddy give it to you……you may suggest craps or blackjack as opposed to slots as they are actually very simple to learn to play and have a far smaller house edge….
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