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September, 2006 NewsletterConstruction Loan News Interested in a Construction Loan but Don't Know Where to Start? Take This Questionare What is the square footage of the home you are looking to build? What is the future appraised value of your home? What is the lot Value/Cost? How long have you owned it? What is the balance to be paid off at closing? What is the builder fee (materials, labor, architect and permit) or are you going to be a Owner Builder with COBS Homes?
What kind of construction term does the builder require? What kind of doc type will you be using for this loan (full, stated, no ratio? What kind of loan program are you interested in (30 yr, 15yr, 3/1 or 5/1, 1 yr fixed or LIBOR)? Do you know your FICO score? How much do you have in assets? If this is a remodel loan, what is the first lien balance? How long have you lived there?
Contact COBS Homes Construction Consultant to Review your Answers!
Be Your Owner Builder with These Helpful Tools: Sweat Equity You should start to think about whether you (or a family member or friend) will participate in any phase of your construction project. Our Owner Builder programs allow you to utilize these tools to help you save money in your project. This participation could range from performing aspects of the actual construction to simply sweeoing up and/ or taking care of disposal of construction items. While our Owner Builder programs encourage "sweat equity" in the actual construction, there will need verification that the participant is qualified to perform the task. While it seems that the unpaid participation would necessarily save you money, it could slow down the project pace and causes you to uncur interest expenses that exceed the labor cost savings. It is important that you know exactly how much time, expertise, and special tools and equipment are necessary before taking on a project so that you don't bite off more than you can chew. Therefore, if you (or any person who is not being paid for their work) intend to participate in the construction work, you will need to complete a Sweat Equity Verification Form and forward it to your Transaction Coordinator. Comparative Market Analysis, CMA Lenders require that the value of your new home be greater than the cost to build that home. You want to save money, and the goal is to help you build equity and save money building you new home. The market values of comparable, recently sold homes, in the close proximity to you building lot will be the determining factors of a competative Market Analysis. How much are homes selling for in your area? What is the size (square footage) and features of homes in your area? The CMA will help you to determine the house plan(s) best suited for your area and building lot. An appraisal will be performed after your building lot, blue print, and building specifications are determined abd before you close on the construction loan. The CMA will give you the comparable homes and their average sales prices and dates which will give you an idea of the end value. Eventually the appraisal will take the place of the CMA, as it is a lender required document.
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