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Started By
Message
Mortgage-Building a new home
Posted on 9/7/11 at 4:15 pm
Posted on 9/7/11 at 4:15 pm
I am in the process of building my first home. I have a builder who will do the majority of the work. The only thing that I will sub-contract out is the swimming pool and fence. the builder advised this so that I would save money from his mark up. He was very open with me. My question is, can I get a construction loan to include the price of the pool and fence if it is not in my builder's plans? Do I just need to attach it to the plans with the pool and fence guys contracts? I also have a land loan that I want to be rolled into my permanent mortgage when it is all said and done.
2
Posted on 9/7/11 at 4:56 pm to rmumph1
Are you doing a construction loan and the builder will take draws after certain stages or is the builder financing the build and will get all of his money at closing?
Since you have a land loan already I assume you are doing a construction loan. If this is the case the bank that handles the construction loan will more than likely want to pay off your land loan first that way they have the first mortgage on the property.
If this is the case go to the bank with your amount you owe on the land loan, your builders quote and quotes for the pool and the fence and tell them you want this amount of money.
Of course they will appraise your plans and then make you jump through 1000 hoops before they give you the money.
Just built a new house a year ago. I sub contracted everything myself. Bank was the worst part of the entire process.
Since you have a land loan already I assume you are doing a construction loan. If this is the case the bank that handles the construction loan will more than likely want to pay off your land loan first that way they have the first mortgage on the property.
If this is the case go to the bank with your amount you owe on the land loan, your builders quote and quotes for the pool and the fence and tell them you want this amount of money.
Of course they will appraise your plans and then make you jump through 1000 hoops before they give you the money.
Just built a new house a year ago. I sub contracted everything myself. Bank was the worst part of the entire process.
Posted on 9/8/11 at 9:55 am to ScottieP
Yes, I am getting construction loan from the bank that has my land loan. The plan is to have the builder take draws from the construction loan. The permenant loan will come from a different bank. The permenant bank will appraise the home at the beginning of the process. They called it "subject to completion" appraisal. I'm just so worried I will miss something and delay the process. At the same time I have to sell the trailer that I am living in. I'm not sure when to put this up for sale. It will have to be moved as the land it sits on now is not mine. Very stressful times as I also have a two month old at home.
Posted on 9/8/11 at 11:57 am to rmumph1
I hear what you are saying. We put our house for sale and it sold in 3 weeks. We moved in with my parents while we were building the house. Which I feared but it was a blessing. We had no bills while we were building the house. Was able to sink a lot of cash into the house and was able to actually take out less in permenant loan than our construction loan. Take what the bank will give you for the construction loan. You are only going to pay interest on the money you take not the whole sum. That way you have a little wiggle room.
Posted on 9/8/11 at 11:59 am to rmumph1
quote:
The only thing that I will sub-contract out is the swimming pool and fence. the builder advised this so that I would save money from his mark up.
How about you subcontract everything and save his mark up on the entire house?
Posted on 9/8/11 at 12:05 pm to Chad504boy
quote:
How about you subcontract everything and save his mark up on the entire house?
B/C you can't sue yourself when a house you built yourself falls down.
Posted on 9/8/11 at 12:09 pm to MikeBRLA
That and the headache. I am stressed enough with the pool and fence. I don't have time to micromanage everything.
Posted on 9/9/11 at 1:17 pm to rmumph1
We have plenty of people who come in my office every week who have built their on house before. Most of them say, "never again".
Posted on 9/9/11 at 1:28 pm to MikeBRLA
quote:
B/C you can't sue yourself when a house you built yourself falls down.
But you can sue your insured sub contractors who performed faulty workmanship.
Posted on 9/9/11 at 2:12 pm to Chad504boy
quote:
But you can sue your insured sub contractors who performed faulty workmanship.
True but they will in turn blame another sub, and you, the general contractor are still left holding the bag.
Example... if the slab cracks you would try and sue the slab company, right? Owner of said slab company will in turn blame whoever did your soil compaction tests and throw it right back at you. And you, the contractor, might not have even known to do a soil compaction test at all. In this scenario, you are still screwed.
This post was edited on 9/9/11 at 2:16 pm
Posted on 9/9/11 at 2:31 pm to MikeBRLA
That why I pay the builder. I want someone to yell at when it isn't done right.
Posted on 9/9/11 at 5:54 pm to guttata
Be prepared to spend an additional 20% when building....Most contractors are full of it.
Posted on 9/10/11 at 6:58 am to LawLessTyGer
Full of it for making a profit while doing things the right way?
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