Do you need cash for your ongoing construction work? Do you need cash urgently? Do not worry. With a construction loan you can perfectly meet your monetary requirement.
A construction loan is provided to borrower to cover sudden monetary void while constructing a house. This loan is also called as story loan, because, creditors offer the loan after knowing the story behind construction. However, if you opt for a construction loan, you can avail the any sum in between £50,000-£2,000,000. Usually, this loan is offered for a short period of time.
Now, let’s talk about the interest rate of a construction loan. The interest rate of this loan is decided on the basis of various factors, such as, the stage of work, agreement among the parties and so on. Normally, two options are available with this loan, adjustable and variable rates options. As a construction loan is a short-term loan, therefore, the interest rate of this loan is relatively high. So, do not for get to compare various loan quotes before applying for a construction loan.
While availing a construction loan, you can opt for construction to permanent loan program. According to this program, a construction loans will be converted to mortgage loan after the issue of the possession certificate. But do not think that in that case you will have to pay for two different loans. In case your construction loan is changed to mortgage loan, then one will be application and other one closing.
But always bear in your mind that like secured loans, in a construction loan, there is a chance of collateral repossession. In this option, your home will play the role of collateral, thus, if you cannot repay the amount, your collateral will be seized. So, think properly before taking a decision. In such cases, experts’ advice can show you the right way.
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is working as financial consultant for chance for loans . To find a construction loan, unsecured home improvement loan, personal loan, unsecured loan, improvement loan at cheap rates that best suits your needs visit http://www.chanceforloans.co.uk
วันพุธที่ 30 กันยายน พ.ศ. 2552
วันอังคารที่ 29 กันยายน พ.ศ. 2552
Construction Loan Basics
It might not be too big of an exaggeration to say that the construction loan is one of the more daunting aspects of building your custom home. Before we started our project, I had nightmares about trying to pay two full mortgages at the same time (our existing mortgage and the construction loan), and I didn't see how it was at all possible. However, the reality ended up much more reasonable than I dared hope.
COLLATERAL: Many – but not all – mortgage companies require you to own your land first before you apply for the construction loan. That way, if the borrower defaults, the bank has a way to recoup their investment. Some banks will let you roll in the land purchase with the construction loan, but you may have to pay a premium.
TIMING: Your standard construction loan will be based on the one year plan. It's perfectly reasonable to expect to finish within a year, unless you are building a handcrafted log home. The good news is that you aren't obligated for the full construction loan amount from day one. You only have to pay interest for the amount of money you actually borrow from each draw. So you won't really be carrying the full mortgage until the end of construction, at which point you will roll the construction loan over to a conventional mortgage.
BUDGETING: Before you apply for the construction loan, you must get all your quotes in order. Banks are not happy about increasing the amount of money you ask for. Be sure to account for all the sub-contractors (plumbers, masons, electricians, excavators, landscapers), the well and septic, the windows and roof, the painters, and even the grass seed. Your mortgage representative will expect you to have a handle on all your financial needs (see my article BREAKING DOWN THE BUDGET OF YOUR LOG HOME for more specifics). If some of these expenses will be out of pocket, it wouldn't hurt to include them in your construction loan request anyway, so you have a cost overrun buffer. And get more than one quote if possible, then use the highest quote in the construction loan request. If you go with the lower quoted job, you'll have another buffer in your favor.
Before the mortgage company agrees on the loan, they will require a copy of the floor plan, permits, and survey. Then they will send out an appraiser who will inspect your property and determine whether your project will appraise for the amount of money they are committing to. Luckily, more and more banks are giving log homes a fair appraisal, but it helps to choose a company that specializes in log homes or your market value may come in too low.
DRAWS: When you've itemized your anticipated expenses, you can share this with your mortgage rep., who will then ask you how you would like to break down the disbursements (or "draws" as we commonly know them). This will be your decision (with a little hand-holding). At first, you might want to schedule a couple dozen draws, until you realize that there is a service charge attached to every draw. For instance, every time the bank releases a draw, you have to notify them a few days in advance. The bank sends out an inspector to verify that the promised work was performed. Then they order a Title Search to verify that you haven't had any liens put on your property since the last draw (this costs about $125 each time).
This leads us to the next issue that pertains especially to building a log home. Normally, banks release a draw after the work has been completed. However, log home manufacturers require COD when the logs are delivered (or ideally the day before). Historically this had been a bone of contention between the banks and manufacturers, until certain banks took the lead and set up accounts directly with the log home companies. This expedited the whole process. These direct deposits become draws on your construction loan.
EXAMPLE: In our case, we ordered a total of 11 draws. On settlement of the construction loan, the bank started us with about $38,000 for misc. expenses. We used much of this to bridge the gap between draws (the contractors want to get paid regularly). There was a draw for the Log Kit deposit. There was a draw for our Superior Walls precast foundation (another direct deposit). Another draw paid for the COD log delivery; another draw paid for the window delivery.
Then things got more tricky, because the next draw covered the well and septic, which had to be completed first. Once the log walls were raised another draw came, another when the "weathered-in shell" was complete, and another draw when the mechanicals were installed. The last draw came at the end of the project, but the bank wouldn't release the money until we had stained the house and planted grass seed. They wanted to make sure the house was ready for sale.
With luck, you won't be delayed by weather or on-site errors, which could derail your whole plan. However, if you don't have some extra money set aside, your contractors might quit working until they get paid, knowing full well that you won't get paid until the work is finished. Coffee and donuts help to keep relations smooth, but nothing works like cash.
And remember: if by some miracle you don't use all the money you requested in the construction loan, you can always give the rest back. So don't cut corners. Estimate high, spend less, and you just might have enough left over for that luxury item you always wanted.
Mercedes Hayes specializes in Log Homes and Residential Real estate in New Jersey and Pennsylvania. She lives in a log home she designed herself, which is featured both in "Log Home Living" and "Town and Country" magazines. You can learn more about log homes and the Delaware Valley at http://www.MercedesHayes.com
COLLATERAL: Many – but not all – mortgage companies require you to own your land first before you apply for the construction loan. That way, if the borrower defaults, the bank has a way to recoup their investment. Some banks will let you roll in the land purchase with the construction loan, but you may have to pay a premium.
TIMING: Your standard construction loan will be based on the one year plan. It's perfectly reasonable to expect to finish within a year, unless you are building a handcrafted log home. The good news is that you aren't obligated for the full construction loan amount from day one. You only have to pay interest for the amount of money you actually borrow from each draw. So you won't really be carrying the full mortgage until the end of construction, at which point you will roll the construction loan over to a conventional mortgage.
BUDGETING: Before you apply for the construction loan, you must get all your quotes in order. Banks are not happy about increasing the amount of money you ask for. Be sure to account for all the sub-contractors (plumbers, masons, electricians, excavators, landscapers), the well and septic, the windows and roof, the painters, and even the grass seed. Your mortgage representative will expect you to have a handle on all your financial needs (see my article BREAKING DOWN THE BUDGET OF YOUR LOG HOME for more specifics). If some of these expenses will be out of pocket, it wouldn't hurt to include them in your construction loan request anyway, so you have a cost overrun buffer. And get more than one quote if possible, then use the highest quote in the construction loan request. If you go with the lower quoted job, you'll have another buffer in your favor.
Before the mortgage company agrees on the loan, they will require a copy of the floor plan, permits, and survey. Then they will send out an appraiser who will inspect your property and determine whether your project will appraise for the amount of money they are committing to. Luckily, more and more banks are giving log homes a fair appraisal, but it helps to choose a company that specializes in log homes or your market value may come in too low.
DRAWS: When you've itemized your anticipated expenses, you can share this with your mortgage rep., who will then ask you how you would like to break down the disbursements (or "draws" as we commonly know them). This will be your decision (with a little hand-holding). At first, you might want to schedule a couple dozen draws, until you realize that there is a service charge attached to every draw. For instance, every time the bank releases a draw, you have to notify them a few days in advance. The bank sends out an inspector to verify that the promised work was performed. Then they order a Title Search to verify that you haven't had any liens put on your property since the last draw (this costs about $125 each time).
This leads us to the next issue that pertains especially to building a log home. Normally, banks release a draw after the work has been completed. However, log home manufacturers require COD when the logs are delivered (or ideally the day before). Historically this had been a bone of contention between the banks and manufacturers, until certain banks took the lead and set up accounts directly with the log home companies. This expedited the whole process. These direct deposits become draws on your construction loan.
EXAMPLE: In our case, we ordered a total of 11 draws. On settlement of the construction loan, the bank started us with about $38,000 for misc. expenses. We used much of this to bridge the gap between draws (the contractors want to get paid regularly). There was a draw for the Log Kit deposit. There was a draw for our Superior Walls precast foundation (another direct deposit). Another draw paid for the COD log delivery; another draw paid for the window delivery.
Then things got more tricky, because the next draw covered the well and septic, which had to be completed first. Once the log walls were raised another draw came, another when the "weathered-in shell" was complete, and another draw when the mechanicals were installed. The last draw came at the end of the project, but the bank wouldn't release the money until we had stained the house and planted grass seed. They wanted to make sure the house was ready for sale.
With luck, you won't be delayed by weather or on-site errors, which could derail your whole plan. However, if you don't have some extra money set aside, your contractors might quit working until they get paid, knowing full well that you won't get paid until the work is finished. Coffee and donuts help to keep relations smooth, but nothing works like cash.
And remember: if by some miracle you don't use all the money you requested in the construction loan, you can always give the rest back. So don't cut corners. Estimate high, spend less, and you just might have enough left over for that luxury item you always wanted.
Mercedes Hayes specializes in Log Homes and Residential Real estate in New Jersey and Pennsylvania. She lives in a log home she designed herself, which is featured both in "Log Home Living" and "Town and Country" magazines. You can learn more about log homes and the Delaware Valley at http://www.MercedesHayes.com
วันจันทร์ที่ 28 กันยายน พ.ศ. 2552
Home Construction Loans
Home construction loans are loans aimed at helping a family build a house when they don’t have enough money to do so. It is the dream of many families to get rid of monthly rent payments and have a house of their own. Home construction loans can fulfill this dream; however, borrowers should be very careful about their aims and choices.
The first thing to consider is the size of the budget that the family intends to spend on the new house. When money comes all at once, it is easy to ask for something that you cannot normally afford. This can be a trick for many families who dream of owning a house that is better than their economic capacity allows them to. Moreover, some families fall into the trap of planning for things that they do not currently need (a garage, more rooms for kids that will potentially be born, and the like.). Those two aspects can raise the loan dramatically, and there are countless cases where families struggle to pay back what they owe.
Another thing to consider is whether or not the family will be able to pay back the entire loan in the timeframe that the loan agreement specified. The problem here is not the initial amount that the borrower has asked for, but mostly the extra interest that needs to be paid to the lender. As time passes, pressure becomes even higher, and if the borrower doesn’t manage to escape from the situation, then he ends up loosing everything or paying many times the initial amount.
Finally, the family should consider whether or not it might be better for them to take the loan at a later time. A typical example would be to take the loan as soon as both parents have secured a job or as soon as they are provided with economic assistance from a non-profit source.
Construction Loans provides detailed information on Affordable Construction Loans, Bad Credit Construction Loans, Church Construction Loans, Commercial Construction Loans and more. Construction Loans is affiliated with Commercial Mortgage Loans.
The first thing to consider is the size of the budget that the family intends to spend on the new house. When money comes all at once, it is easy to ask for something that you cannot normally afford. This can be a trick for many families who dream of owning a house that is better than their economic capacity allows them to. Moreover, some families fall into the trap of planning for things that they do not currently need (a garage, more rooms for kids that will potentially be born, and the like.). Those two aspects can raise the loan dramatically, and there are countless cases where families struggle to pay back what they owe.
Another thing to consider is whether or not the family will be able to pay back the entire loan in the timeframe that the loan agreement specified. The problem here is not the initial amount that the borrower has asked for, but mostly the extra interest that needs to be paid to the lender. As time passes, pressure becomes even higher, and if the borrower doesn’t manage to escape from the situation, then he ends up loosing everything or paying many times the initial amount.
Finally, the family should consider whether or not it might be better for them to take the loan at a later time. A typical example would be to take the loan as soon as both parents have secured a job or as soon as they are provided with economic assistance from a non-profit source.
Construction Loans provides detailed information on Affordable Construction Loans, Bad Credit Construction Loans, Church Construction Loans, Commercial Construction Loans and more. Construction Loans is affiliated with Commercial Mortgage Loans.
วันอาทิตย์ที่ 27 กันยายน พ.ศ. 2552
Home Construction Loans
A home construction loan is a loan where the lender has to know the story behind the construction of the house before sanctioning the loan. In other words, the home construction loan can be called a story loan, which is to be understood before a decision is made.
A home construction loan is one of the loans that require interest-only payments during construction. Principal payment is done only upon completion. A house is considered complete when it receives its certificate of occupancy. The interest rates in this loan are usually variable. The contractor and the lender establish a schedule based on the stages of the construction of the house, and interest is charged likewise. Another point to be considered in home construction loans is how much of the project cost the lender is willing to lend. The land that you own for the construction of the home can be considered as equity on the construction loan.
With a home construction loan, you have the option of opting for the construction-to-permanent financing program wherein the loan is converted into a mortgage loan once the certificate of occupancy is issued. In this way, there is no need to make two loans; there is only one application with one closing. If this sounds feasible, it is best to rate lock from that lender. It is important to note that the home construction loan is not meant to be around for a long time. You take a loan until the completion of the home and make the necessary payments.
When choosing the best home construction loan, it is best to compare the rates of the different financial institutions offering this loan. Usually, the lower the rate, the better deal is, but it is important to read the fine print and know the details of the different offers.
Home Loans provides detailed information about home loans, home equity loan rates, home equity loans and more. Home Loans is affiliated with Mortgage Origination Software.
A home construction loan is one of the loans that require interest-only payments during construction. Principal payment is done only upon completion. A house is considered complete when it receives its certificate of occupancy. The interest rates in this loan are usually variable. The contractor and the lender establish a schedule based on the stages of the construction of the house, and interest is charged likewise. Another point to be considered in home construction loans is how much of the project cost the lender is willing to lend. The land that you own for the construction of the home can be considered as equity on the construction loan.
With a home construction loan, you have the option of opting for the construction-to-permanent financing program wherein the loan is converted into a mortgage loan once the certificate of occupancy is issued. In this way, there is no need to make two loans; there is only one application with one closing. If this sounds feasible, it is best to rate lock from that lender. It is important to note that the home construction loan is not meant to be around for a long time. You take a loan until the completion of the home and make the necessary payments.
When choosing the best home construction loan, it is best to compare the rates of the different financial institutions offering this loan. Usually, the lower the rate, the better deal is, but it is important to read the fine print and know the details of the different offers.
Home Loans provides detailed information about home loans, home equity loan rates, home equity loans and more. Home Loans is affiliated with Mortgage Origination Software.
วันเสาร์ที่ 26 กันยายน พ.ศ. 2552
Understanding Construction Loans For Modular Homes
First, a construction loan for a modular home will carry a greater interest rate than a standard mortgage, because it is actually a line of credit and will cover only as much of the cost of building your modular home as been determined in advance. These costs will include the price of your building lot; the cost of all building permits and other legal fees associated with your construction; the cost of your modular home itself; and the costs of any labor and additional materials required to finish your home.
You may also find a lender of construction loans for Modular Homes who will agree to include the amount of interest you pay during the construction and cover any cost overruns. When the work on your home is completed, the total amount you have run up on your line of credit will be converted to a standard residential mortgage.
What Construction Loans For Modular Homes Won't Cover
You'll need to find other ways to finance the early stages of your modular home instruction, including soil and perk tests, building plans, and your site plan, which must be approved by your municipal zoning board before you will be have access to the funds from your construction loan for a modular home.
How Construction Loans For Modular Homes Are Disbursed
None of the work being done on your modular home will be paid for until your lender has had it inspected, and when a particular phase of the construction has been completed and met inspection standards, payment will be made directly to the suppliers and subcontractors. If you need to ask for more payments than the number to which your lender originally agreed, you may be charged an additional fee for each extra payment.
Qualifying For Construction Loans For Modular Homes
Like traditional mortgages, construction loans for modular homes may require you to come up with a down payment. The chances of this will be higher if you are requesting a very large loan, or don't own the lot on which your home will be constructed. But there are lenders of construction loans for modular homes who will give 100% financing even if the person building the home doesn't own the lot outright.
And as with a traditional home purchase, you should establish a budget and stick with it when you are building a modular home. You may be tempted to keep asking for extras when your modular home is being designed, but dong so can throw your entire project budget out of whack and make it more difficult for you to qualify for a construction loan for modular home construction.
You can also find more info on modular log cabin. Modularhomesbasic.com is a comprehensive resource which provide information about Homes.
You may also find a lender of construction loans for Modular Homes who will agree to include the amount of interest you pay during the construction and cover any cost overruns. When the work on your home is completed, the total amount you have run up on your line of credit will be converted to a standard residential mortgage.
What Construction Loans For Modular Homes Won't Cover
You'll need to find other ways to finance the early stages of your modular home instruction, including soil and perk tests, building plans, and your site plan, which must be approved by your municipal zoning board before you will be have access to the funds from your construction loan for a modular home.
How Construction Loans For Modular Homes Are Disbursed
None of the work being done on your modular home will be paid for until your lender has had it inspected, and when a particular phase of the construction has been completed and met inspection standards, payment will be made directly to the suppliers and subcontractors. If you need to ask for more payments than the number to which your lender originally agreed, you may be charged an additional fee for each extra payment.
Qualifying For Construction Loans For Modular Homes
Like traditional mortgages, construction loans for modular homes may require you to come up with a down payment. The chances of this will be higher if you are requesting a very large loan, or don't own the lot on which your home will be constructed. But there are lenders of construction loans for modular homes who will give 100% financing even if the person building the home doesn't own the lot outright.
And as with a traditional home purchase, you should establish a budget and stick with it when you are building a modular home. You may be tempted to keep asking for extras when your modular home is being designed, but dong so can throw your entire project budget out of whack and make it more difficult for you to qualify for a construction loan for modular home construction.
You can also find more info on modular log cabin. Modularhomesbasic.com is a comprehensive resource which provide information about Homes.
วันศุกร์ที่ 25 กันยายน พ.ศ. 2552
Florida Construction Mortgages
There are different mortgages for different financial situations. There are also mortgages for different purposes in taking out a loan. If you are planning to build a home and you need the funds for the various stages of constructing one, then the best mortgage for you is called a construction mortgage. The state of Florida offers varying options for construction mortgages.
The construction mortgage program
The most common program for construction mortgage is an interest payment to be paid only during construction or until the home is complete. By the time of completion, the loan is converted into a conventional mortgage, usually a fixed-rate mortgage, until the end of the term. Payments can be made weekly, semi-weekly, bi-monthly, or monthly, depending on the available program.
When construction mortgage is best
This kind of mortgage is ideal for the construction of residential dwellings. This is a great convenience for those who have been wanting to build their own home. Building a home can be fraught with delays like having inadequate funds and unexpected costs.
Other payment options
Aside from the schedule of payments, other payment options include a tiered mortgage option. This option combines different payment options, amortization schedules, terms, and rates into one mortgage. There are also pre-payment options to pay off your mortgage quickly. For example, you can increase payments by 20 percent off your original balance each year. Another option is the match/miss option. What happens here is that you can match one or more payments and then miss your next payment or at a later date for each matched payment within the term. These options all depend on the bank or lending company. Make sure you know all the options so that you can choose which will work best for you considering your financial circumstances.
Florida Mortgages provides detailed information on Florida Mortgages, Florida Home Mortgages, Florida Interest Only Mortgages, Florida Mortgage Brokers and more. Florida Mortgages is affiliated with Florida Mortgage Interest Rates.
The construction mortgage program
The most common program for construction mortgage is an interest payment to be paid only during construction or until the home is complete. By the time of completion, the loan is converted into a conventional mortgage, usually a fixed-rate mortgage, until the end of the term. Payments can be made weekly, semi-weekly, bi-monthly, or monthly, depending on the available program.
When construction mortgage is best
This kind of mortgage is ideal for the construction of residential dwellings. This is a great convenience for those who have been wanting to build their own home. Building a home can be fraught with delays like having inadequate funds and unexpected costs.
Other payment options
Aside from the schedule of payments, other payment options include a tiered mortgage option. This option combines different payment options, amortization schedules, terms, and rates into one mortgage. There are also pre-payment options to pay off your mortgage quickly. For example, you can increase payments by 20 percent off your original balance each year. Another option is the match/miss option. What happens here is that you can match one or more payments and then miss your next payment or at a later date for each matched payment within the term. These options all depend on the bank or lending company. Make sure you know all the options so that you can choose which will work best for you considering your financial circumstances.
Florida Mortgages provides detailed information on Florida Mortgages, Florida Home Mortgages, Florida Interest Only Mortgages, Florida Mortgage Brokers and more. Florida Mortgages is affiliated with Florida Mortgage Interest Rates.
วันพฤหัสบดีที่ 24 กันยายน พ.ศ. 2552
Commercial Mortgage Loans - Want a Commercial Construction Loan? Go Green!
Like it or not, environmentally conscious, or "green" principles have come to dominate the field of commercial real estate development and commercial mortgage lending. Green building and sustainable design are now the standard in new commercial construction and residential developments. And, with local and national governments getting greener all the time, look for energy and resource efficiency to become mandatory, with green mandates being placed directly into building codes. Funding sources such-as banks, Wall Street brokers, insurance companies and hedge funds, are following suite and these principles are rapidly becoming a part of the commercial mortgage industry.
The US Department of Energy's Center for Sustainable Development recently reported that 40% of the entire world's energy supply is used by buildings. That's a huge number. And, in the United States, construction accounts for our largest manufacturing sector, representing a staggering 13% of US GDP and nearly 50% of total wealth creation. Even tiny percentage gains in efficiency can amount to massive over-all energy savings.
Both institutional and private lenders as well as the REIT, (Real Estate Investment Trust) hedge fund and private equity industries have all embraced the environmental building movement. Green is the color of money and green is the color of commercial mortgage construction lending now into the future.
Lenders love green construction because good for profits as-well-as being good for the planet. Energy costs money, resources cost money and cleaning up messes' costs money. Saving energy, saving resources and sustaining a site all save money, during construction and throughout the operational life of the property. Lenders know that green means efficient and, when they evaluate a project for financing they want to be assured that the funds they invest will be used cost-effectively and that the building will be economically viable.
Environmentally sound buildings can cost substantially less to operate than comparable buildings that disregard such efficiencies and tenants and their clients report higher customer satisfaction rates when doing business in them. To a lender, whose capital is secured by the building, this translates into higher quality collateral and makes their investments more secure.
As a commercial real estate investment banking professional, I can attest to the fact that developers who choose designs that are not green will find it very difficult to raise capital or secure loan approvals for their projects. We are in the midst of a sever liquidity crisis; construction money is in short supply. Lenders are giving priority to green development leaving very little capital available for conventional construction.
The Federal Government's LEED (Leadership in Energy & Environmental Design) rating system awards silver, gold and platinum certification to buildings that reduce waste and save energy and lower costs. LEED certification is almost (although not officially) a mandatory requirement in-order-to get a big construction project funded today.
Being green is no longer just the passion of the activist anymore; it is the new emerging standard in commercial construction as-well-as commercial real estate finance. Investors and developers who need commercial mortgages will do well to pay attention to this trend.
MasterPlan Capital LLC - Commercial Real Estate Investment Bankers
Apply For a Commercial Real Estate Mortgage Loan Online at: http://www.masterplancapital.com Lending for the purchase, refi and development of commercial real estate property. Quick answers, professional service.
Glenn Fydenkevez is President of MasterPlan Capital LLC. He is a 20+ year veteran of Wall Street and has served as an officer at one of the world's largest investment banks. You may contact him at:
glenn.fydenkevez@masterplancapital.com
The US Department of Energy's Center for Sustainable Development recently reported that 40% of the entire world's energy supply is used by buildings. That's a huge number. And, in the United States, construction accounts for our largest manufacturing sector, representing a staggering 13% of US GDP and nearly 50% of total wealth creation. Even tiny percentage gains in efficiency can amount to massive over-all energy savings.
Both institutional and private lenders as well as the REIT, (Real Estate Investment Trust) hedge fund and private equity industries have all embraced the environmental building movement. Green is the color of money and green is the color of commercial mortgage construction lending now into the future.
Lenders love green construction because good for profits as-well-as being good for the planet. Energy costs money, resources cost money and cleaning up messes' costs money. Saving energy, saving resources and sustaining a site all save money, during construction and throughout the operational life of the property. Lenders know that green means efficient and, when they evaluate a project for financing they want to be assured that the funds they invest will be used cost-effectively and that the building will be economically viable.
Environmentally sound buildings can cost substantially less to operate than comparable buildings that disregard such efficiencies and tenants and their clients report higher customer satisfaction rates when doing business in them. To a lender, whose capital is secured by the building, this translates into higher quality collateral and makes their investments more secure.
As a commercial real estate investment banking professional, I can attest to the fact that developers who choose designs that are not green will find it very difficult to raise capital or secure loan approvals for their projects. We are in the midst of a sever liquidity crisis; construction money is in short supply. Lenders are giving priority to green development leaving very little capital available for conventional construction.
The Federal Government's LEED (Leadership in Energy & Environmental Design) rating system awards silver, gold and platinum certification to buildings that reduce waste and save energy and lower costs. LEED certification is almost (although not officially) a mandatory requirement in-order-to get a big construction project funded today.
Being green is no longer just the passion of the activist anymore; it is the new emerging standard in commercial construction as-well-as commercial real estate finance. Investors and developers who need commercial mortgages will do well to pay attention to this trend.
MasterPlan Capital LLC - Commercial Real Estate Investment Bankers
Apply For a Commercial Real Estate Mortgage Loan Online at: http://www.masterplancapital.com Lending for the purchase, refi and development of commercial real estate property. Quick answers, professional service.
Glenn Fydenkevez is President of MasterPlan Capital LLC. He is a 20+ year veteran of Wall Street and has served as an officer at one of the world's largest investment banks. You may contact him at:
glenn.fydenkevez@masterplancapital.com
วันพุธที่ 23 กันยายน พ.ศ. 2552
Construction Mortgage VS Mechanics Lien - Win, Lose Or Draw?
Recently, I met with a commercial lender who mentioned a problem with one of his projects. Construction had started, but the developer hadn't closed the construction loan. Thus the lender's mortgage hadn't been recorded, but likely would be soon. He wondered how the delay might affect the priority of his bank's mortgage lien. Attorneys representing secured lenders in commercial foreclosure cases, or contractors in mechanic's lien actions, should be conversant with Indiana law in this area.
1910: A Draw. The Indiana Supreme Court’s 1910 decision in Ward v. Yarnelle, 91 N.E.7 (Ind. 1910) is the landmark opinion on this subject. At the time, Indiana’s mechanic’s lien statute “failed to address the lien priority between a [construction mortgage] and the mechanic’s liens of those who [completed] the construction.” In Re Venture, 139 B.R. 890, 895 (N.D. Ind. 1990) (excellent summary of the law). The Court therefore announced the equitable “doctrine of parity” in which a “real estate mortgage executed while a building was in the process of construction was entitled to equal priority with the claims of [contractors that] worked after [recordation] of the mortgage and with full knowledge of its purpose and effect.” Beneficial Finance v. Wegmiller Bender, 402 N.E.2d 41, 47 (Ind. Ct. App. 1980) (no parity because contractor completed its work before lender recorded its mortgage); Brenneman Mechanical v. First Nat. Bank, 495 N.E.2d 233, 242 (Ind. Ct. App. 1986) (parity because contractors had knowledge of loan, which helped pay them).
Whether the contractor had knowledge of the construction mortgage was critical to the Ward analysis. In such instances, the Court felt that lenders and contractors were in a kind of “common enterprise.” Ward, 91 N.E. at 15. Under Ward, if funds derived from the mortgage were used in the construction project and if the contractors had knowledge of the loan when they performed their work, then the mortgage and the mechanic’s lien had equal priority. Conversely, if the loan was not for purposes of construction or if the contractors worked without knowledge of the purpose of the loan, then the mortgage had priority over mechanic’s liens for work performed after recordation of the mortgage. Venture, 139 B.R. at 896
1999: Statutory Amendments. I.C. §32-28-3-5 is the pivotal statute. Subsection (b) provides that a mechanic’s lien is “created” when the lien notice is recorded. But the recorded lien relates back to the date the work began, which could pre-date a mortgage. In 1999, the General Assembly added the language now in subsection (d) that says construction mortgages have priority over mechanic’s liens if the mortgage is recorded before the notice of mechanic’s lien is recorded (not created). My reading is that subsection (d) disposes of Ward’s doctrine of parity, at least as to commercial and industrial projects. (Note that section 5(d)(1)-(3) has carve-outs for certain residential and utility projects.) Accordingly, courts should focus on relative filing dates, and not on work dates or contractor knowledge.
Post-1999: One Case. The meaning of section 5(d) has not been tested on appeal, however, and I.C. §32-28-3-2(b)(2) priority, which favors contractors, may to some extent conflict with section 5(d) priority, which favors lenders. For more on this subtlety, read section 2(b), as well as Provident Bank v. Tri-County Southside, 804 N.E.2d 161, reh’g granted, 806 N.E.2d 802 (Ind. Ct. App. 2004), which gives some insight into the potential inconsistency. (Provident Bank also has an amusing result. The opinion dealt with a contractor’s improvement [installation of a driveway] at a residence long after a purchase money mortgage had been recorded. Believe it or not, the majority held that the contractor’s statutory remedy was to remove and sell the driveway.) Anyway, in the dissenting opinion, Judge Sharpnack toyed with Ward and the new I.C. §32-28-3-5. “In 1999, our legislature amended I.C. §32-28-3-5 and specifically addressed the situation before our supreme court in Ward and again discussed by the bankruptcy court in Venture.” Id. at 168. Judge Sharpnack concluded in dicta that I.C. §32-28-3-5(d) applies “where funds from the loan secured by the mortgage are for the project which gave rise to the mechanic’s lien. In such an instance, the mortgage lien has priority over the mechanic’s liens recorded after the mortgage.” Id. at 169
2007: Lender Wins. At least as to a standard commercial project, therefore, the Ward doctrine of parity seems to be a thing of the past. The lender, in the scenario presented to me, shouldn’t be forced to share equally with any contractors that started construction before the developer closed the deal. Instead, the lender should hold a superior lien, assuming the lender records its mortgage before a contractor records a notice of mechanic’s lien. In other words, if the project goes south, the lender should get paid first. Please e-mail me if you know of any recent trial court or unpublished appellate court opinions touching on the 1999 amendments or the doctrine of parity. Because it’s been almost 100 years since Ward, perhaps we’re due for another landmark opinion from our Supreme Court. As the law evolves, I’ll provide updates on my blog.
John D. Waller is a partner at the Indianapolis law firm of Wooden & McLaughlin LLP. He publishes the blog Indiana Commercial Foreclosure Law at http://commercialforeclosureblog.typepad.com John’s phone number is 317-639-6151, and his e-mail address is jwaller@woodmclaw.com.
1910: A Draw. The Indiana Supreme Court’s 1910 decision in Ward v. Yarnelle, 91 N.E.7 (Ind. 1910) is the landmark opinion on this subject. At the time, Indiana’s mechanic’s lien statute “failed to address the lien priority between a [construction mortgage] and the mechanic’s liens of those who [completed] the construction.” In Re Venture, 139 B.R. 890, 895 (N.D. Ind. 1990) (excellent summary of the law). The Court therefore announced the equitable “doctrine of parity” in which a “real estate mortgage executed while a building was in the process of construction was entitled to equal priority with the claims of [contractors that] worked after [recordation] of the mortgage and with full knowledge of its purpose and effect.” Beneficial Finance v. Wegmiller Bender, 402 N.E.2d 41, 47 (Ind. Ct. App. 1980) (no parity because contractor completed its work before lender recorded its mortgage); Brenneman Mechanical v. First Nat. Bank, 495 N.E.2d 233, 242 (Ind. Ct. App. 1986) (parity because contractors had knowledge of loan, which helped pay them).
Whether the contractor had knowledge of the construction mortgage was critical to the Ward analysis. In such instances, the Court felt that lenders and contractors were in a kind of “common enterprise.” Ward, 91 N.E. at 15. Under Ward, if funds derived from the mortgage were used in the construction project and if the contractors had knowledge of the loan when they performed their work, then the mortgage and the mechanic’s lien had equal priority. Conversely, if the loan was not for purposes of construction or if the contractors worked without knowledge of the purpose of the loan, then the mortgage had priority over mechanic’s liens for work performed after recordation of the mortgage. Venture, 139 B.R. at 896
1999: Statutory Amendments. I.C. §32-28-3-5 is the pivotal statute. Subsection (b) provides that a mechanic’s lien is “created” when the lien notice is recorded. But the recorded lien relates back to the date the work began, which could pre-date a mortgage. In 1999, the General Assembly added the language now in subsection (d) that says construction mortgages have priority over mechanic’s liens if the mortgage is recorded before the notice of mechanic’s lien is recorded (not created). My reading is that subsection (d) disposes of Ward’s doctrine of parity, at least as to commercial and industrial projects. (Note that section 5(d)(1)-(3) has carve-outs for certain residential and utility projects.) Accordingly, courts should focus on relative filing dates, and not on work dates or contractor knowledge.
Post-1999: One Case. The meaning of section 5(d) has not been tested on appeal, however, and I.C. §32-28-3-2(b)(2) priority, which favors contractors, may to some extent conflict with section 5(d) priority, which favors lenders. For more on this subtlety, read section 2(b), as well as Provident Bank v. Tri-County Southside, 804 N.E.2d 161, reh’g granted, 806 N.E.2d 802 (Ind. Ct. App. 2004), which gives some insight into the potential inconsistency. (Provident Bank also has an amusing result. The opinion dealt with a contractor’s improvement [installation of a driveway] at a residence long after a purchase money mortgage had been recorded. Believe it or not, the majority held that the contractor’s statutory remedy was to remove and sell the driveway.) Anyway, in the dissenting opinion, Judge Sharpnack toyed with Ward and the new I.C. §32-28-3-5. “In 1999, our legislature amended I.C. §32-28-3-5 and specifically addressed the situation before our supreme court in Ward and again discussed by the bankruptcy court in Venture.” Id. at 168. Judge Sharpnack concluded in dicta that I.C. §32-28-3-5(d) applies “where funds from the loan secured by the mortgage are for the project which gave rise to the mechanic’s lien. In such an instance, the mortgage lien has priority over the mechanic’s liens recorded after the mortgage.” Id. at 169
2007: Lender Wins. At least as to a standard commercial project, therefore, the Ward doctrine of parity seems to be a thing of the past. The lender, in the scenario presented to me, shouldn’t be forced to share equally with any contractors that started construction before the developer closed the deal. Instead, the lender should hold a superior lien, assuming the lender records its mortgage before a contractor records a notice of mechanic’s lien. In other words, if the project goes south, the lender should get paid first. Please e-mail me if you know of any recent trial court or unpublished appellate court opinions touching on the 1999 amendments or the doctrine of parity. Because it’s been almost 100 years since Ward, perhaps we’re due for another landmark opinion from our Supreme Court. As the law evolves, I’ll provide updates on my blog.
John D. Waller is a partner at the Indianapolis law firm of Wooden & McLaughlin LLP. He publishes the blog Indiana Commercial Foreclosure Law at http://commercialforeclosureblog.typepad.com John’s phone number is 317-639-6151, and his e-mail address is jwaller@woodmclaw.com.
วันอังคารที่ 22 กันยายน พ.ศ. 2552
Bad Credit Mortgage Lenders: Construction Loans - You and Your First Home
Picture it. Your first home. Your dream home. The home that you, yourself, are going to construct. However, you find that you are in a bit of a financial bind. There is no need to fret; the funding for your new home is available through various new home construction lenders.
Although construction loans can be issued to both owners and builders, some lenders are a bit reluctant about lending to inexperienced builders. The loan sometimes includes the cost of the land on which the new home is built. In short, construction loans set up a line of credit that pays the suppliers and subcontractors while the home is being built, making them happy.
A new home construction loan is set up in stages, which are either monthly or in accordance with the building process. During the latter stages, the amount of funds used during the specific period of time is calculated and given to the lender so that the workers can be paid.
Before applying for a construction loan, you must be approved for a residential mortgage in order for construction to begin. Stated income construction loans provide funding to help you build your new home, and do not require verification of your income, whether you are having trouble verifying it, or you simply choose not to disclose that information to the lender. In turn however, the interest rates, and subsequently, the down payment, of stated income construction loans may be a bit higher than that of any other type of new home construction loans because there is more risk involved when the income is not verified. The advantage of this type of construction loan, besides the lack of need for verification, is that these loans tend to be approved at a much faster rate.
Gregrey Pashby is a writer and contributor for Bad Credit Lender who specialize in bad credit loans and hard money loans. Located in La Jolla, California, Bad Credit Lender provides competitive private California hard money loans, bad credit home loans, and bridge loans. In addition, Greg is one of the main contributors to the California Home Mortgage Loan web blog.
Although construction loans can be issued to both owners and builders, some lenders are a bit reluctant about lending to inexperienced builders. The loan sometimes includes the cost of the land on which the new home is built. In short, construction loans set up a line of credit that pays the suppliers and subcontractors while the home is being built, making them happy.
A new home construction loan is set up in stages, which are either monthly or in accordance with the building process. During the latter stages, the amount of funds used during the specific period of time is calculated and given to the lender so that the workers can be paid.
Before applying for a construction loan, you must be approved for a residential mortgage in order for construction to begin. Stated income construction loans provide funding to help you build your new home, and do not require verification of your income, whether you are having trouble verifying it, or you simply choose not to disclose that information to the lender. In turn however, the interest rates, and subsequently, the down payment, of stated income construction loans may be a bit higher than that of any other type of new home construction loans because there is more risk involved when the income is not verified. The advantage of this type of construction loan, besides the lack of need for verification, is that these loans tend to be approved at a much faster rate.
Gregrey Pashby is a writer and contributor for Bad Credit Lender who specialize in bad credit loans and hard money loans. Located in La Jolla, California, Bad Credit Lender provides competitive private California hard money loans, bad credit home loans, and bridge loans. In addition, Greg is one of the main contributors to the California Home Mortgage Loan web blog.
วันจันทร์ที่ 21 กันยายน พ.ศ. 2552
Bad Credit Construction Loans
Some people believe that only people with excellent credit records can qualify for construction loans. In reality, a variety of loans are available to people even with low credit scores. Construction loans are given to people with almost all types of credit. It is just a matter of accepting certain realities for you to secure a decent construction loan.
People with a good credit record usually receive good interest rates when they apply for a construction loan. In general, the better your credit, the better the interest rate that you will receive. However, this implies no restriction to people with insufficient credit. This means that a person whose credit is undesirable can still qualify for a construction loan. Of course, the interest rates are likely not to on the same level as that of someone with a good credit score. Still, the fact remains that bad credit construction loans are perfectly possible.
The interest rates are not static and this applies for bad credit construction loans, too. There are periods when they rise, periods when they fall, and periods when they tend to remain still. However, there is an option called “fixed-rate bad credit construction loans.” This option allows you to lock the interest rate at a specific value. The term available for this option is the amount of time that will be required in order to clear the debt (thirty, twenty, or fifteen years, for example).
With bad credit construction loans and homes, usually between the sixth and ninth month of the construction, draws are paid as the building is being completed. The amount of money is related to the percentage of the building that has been completed so far. Later, when the house is completed, the loan is automatically converted into normal mortgage loan without the need for new settlements.
Construction Loans provides detailed information on Affordable Construction Loans, Bad Credit Construction Loans, Church Construction Loans, Commercial Construction Loans and more. Construction Loans is affiliated with Commercial Mortgage Loans.
People with a good credit record usually receive good interest rates when they apply for a construction loan. In general, the better your credit, the better the interest rate that you will receive. However, this implies no restriction to people with insufficient credit. This means that a person whose credit is undesirable can still qualify for a construction loan. Of course, the interest rates are likely not to on the same level as that of someone with a good credit score. Still, the fact remains that bad credit construction loans are perfectly possible.
The interest rates are not static and this applies for bad credit construction loans, too. There are periods when they rise, periods when they fall, and periods when they tend to remain still. However, there is an option called “fixed-rate bad credit construction loans.” This option allows you to lock the interest rate at a specific value. The term available for this option is the amount of time that will be required in order to clear the debt (thirty, twenty, or fifteen years, for example).
With bad credit construction loans and homes, usually between the sixth and ninth month of the construction, draws are paid as the building is being completed. The amount of money is related to the percentage of the building that has been completed so far. Later, when the house is completed, the loan is automatically converted into normal mortgage loan without the need for new settlements.
Construction Loans provides detailed information on Affordable Construction Loans, Bad Credit Construction Loans, Church Construction Loans, Commercial Construction Loans and more. Construction Loans is affiliated with Commercial Mortgage Loans.
วันอาทิตย์ที่ 20 กันยายน พ.ศ. 2552
Florida Construction Mortgage Loans
Building your own home can be the most exhilarating and accomplished feeling but it can also be a big pain in the neck. Ongoing payment negotiations with your contractors, additional materials, and other unexpected costs can result to delays because of inadequate funds. The various stages of constructing a house is very dynamic and it requires dynamic resources. You can be relieved of this dilemma by simply obtaining a construction mortgage loan. In the state of Florida, there are varied options to choose from.
How it works
Construction mortgage loans are perfect for building a residential dwelling and to help out the soon-to-be-homeowners in the various stages of homebuilding by securing funds. Approval of the loan in the same way that lenders approve of a mortgage (but without the existing collateral but eventually the completed home will become the collateral) will allow the start construction. During this period, payment terms will usually be on an interest only basis until the completion of the home. Upon completion, only the interest rate will be converted into a conventional mortgage program. Usually it is turned into a fixed-rate loan where the borrower pays the principal and interest rates at a fixed amount for the entire lifespan of the mortgage.
Payment options
Like with fixed-rate mortgage loans, the terms could vary from short to long-term. The payment of amortization can vary from weekly, bi-weekly, monthly, to bi-monthly. Aside from schedule of payments, other options include a tiered mortgage scheme where different payment options, terms, amortization schedules, and rates are all under one mortgage. You can also pay off your mortgage quickly with pre-payment options that allow you to increase the payments of your original balance each year. A Match/Miss option is another alternative where you can match one or more payments and then miss a later payment schedule for each matched payment within the term.
Florida Mortgage Loans provides detailed information on Florida Mortgage Loans, Bad Credit Florida Mortgage Loans, Florida Mortgage Loan Calculators, Florida Mortgage Loan Rates and more. Florida Mortgage Loans is affiliated with Second Home Equity Mortgage Loans.
How it works
Construction mortgage loans are perfect for building a residential dwelling and to help out the soon-to-be-homeowners in the various stages of homebuilding by securing funds. Approval of the loan in the same way that lenders approve of a mortgage (but without the existing collateral but eventually the completed home will become the collateral) will allow the start construction. During this period, payment terms will usually be on an interest only basis until the completion of the home. Upon completion, only the interest rate will be converted into a conventional mortgage program. Usually it is turned into a fixed-rate loan where the borrower pays the principal and interest rates at a fixed amount for the entire lifespan of the mortgage.
Payment options
Like with fixed-rate mortgage loans, the terms could vary from short to long-term. The payment of amortization can vary from weekly, bi-weekly, monthly, to bi-monthly. Aside from schedule of payments, other options include a tiered mortgage scheme where different payment options, terms, amortization schedules, and rates are all under one mortgage. You can also pay off your mortgage quickly with pre-payment options that allow you to increase the payments of your original balance each year. A Match/Miss option is another alternative where you can match one or more payments and then miss a later payment schedule for each matched payment within the term.
Florida Mortgage Loans provides detailed information on Florida Mortgage Loans, Bad Credit Florida Mortgage Loans, Florida Mortgage Loan Calculators, Florida Mortgage Loan Rates and more. Florida Mortgage Loans is affiliated with Second Home Equity Mortgage Loans.
วันเสาร์ที่ 19 กันยายน พ.ศ. 2552
Facts and Tips about New Construction Home Loans
New construction home loans are not the same as your typical, everyday home loans. They tend to have different requirements and adhere to different rules. If you wish to know more about new home construction loans, read on. You just might find an easier way to own your dream home.
The Definition of New Construction Home Loans
When you ask for this type of loan, you're asking the mortgage provider to give you the money you need to build your own home.
The Basis of Approval
First and foremost, your mortgage provider would require a detailed explanation as well as accounting on the estimated costs for your home-building project. They'd want to know how much experience you have in the field of construction, how much you estimate you're going to spend on your house and how it's going to look in the end.
Only after you've passed the initial screening, they ask you to submit the usual documents that would enlighten them about your earning capabilities and credit reputation.
The Types of Construction Loans
There are different types of construction loans.
A construction to permanent loan is a two-in-one loan ideal for most people since it would only require you to submit documents and pay closing costs once. This type of loan is a combination of a construction loan and permanent financing. Rather than applying for a construction loan initially, then following it up with a typical home loan, an approved CTP loan can help you save money and time.
A remodeler loan is a second mortgage that's designed to provide financing for a home improvement or remodeling project.
A bridge loan allows you to use the equity on your present home as down payment for your new home.
Lastly, a lot/land loan gives you the resources to buy land instead of building a home.
Home Loans provides detailed information on Home Loans, Home Equity Loans, Home Improvement Loans, Home Equity Loan Rates and more. Home Loans is affiliated with Home Improvement Loans Info.
The Definition of New Construction Home Loans
When you ask for this type of loan, you're asking the mortgage provider to give you the money you need to build your own home.
The Basis of Approval
First and foremost, your mortgage provider would require a detailed explanation as well as accounting on the estimated costs for your home-building project. They'd want to know how much experience you have in the field of construction, how much you estimate you're going to spend on your house and how it's going to look in the end.
Only after you've passed the initial screening, they ask you to submit the usual documents that would enlighten them about your earning capabilities and credit reputation.
The Types of Construction Loans
There are different types of construction loans.
A construction to permanent loan is a two-in-one loan ideal for most people since it would only require you to submit documents and pay closing costs once. This type of loan is a combination of a construction loan and permanent financing. Rather than applying for a construction loan initially, then following it up with a typical home loan, an approved CTP loan can help you save money and time.
A remodeler loan is a second mortgage that's designed to provide financing for a home improvement or remodeling project.
A bridge loan allows you to use the equity on your present home as down payment for your new home.
Lastly, a lot/land loan gives you the resources to buy land instead of building a home.
Home Loans provides detailed information on Home Loans, Home Equity Loans, Home Improvement Loans, Home Equity Loan Rates and more. Home Loans is affiliated with Home Improvement Loans Info.
วันศุกร์ที่ 18 กันยายน พ.ศ. 2552
Cash Shortage during Construction! Avail Construction Loan
A construction loan is the loan that is given to people to meet their cash crisis during the construction of a house. Many a time, people face shortage of cash while the construction is in full swing. In such cases, they need cash within a short notice. A construction loan is the perfect option to handle this situation. These loans are also known as story loans, as lenders offer the loans after being aware of the story behind the construction.
As a construction loan, a borrower can borrow the amount, ranging from £50,000- £2,000,000. These loans are mainly short term loans. The amount is repayable as early as borrowers complete the construction and the house is prepared to be dwelt in.
Based on the few factors, the interest rate of a construction loans is decided. These factors are as follows:
•The stage of construction works
•The agreement among all the parties, involved in this construction, like, borrowers, lenders and contractors.
But, in this context, one thing is necessary to mention. Since, these loans are offered for a short period of time, hence, the interest rate of this loan is a bit higher. Usually, the interest rate is available with adjustable and variable rates options. At the same time, the repayment option of a construction loan needs to be mentioned. Borrowers can pay off the amount with small interest only repayment. Due to this reason, borrowers can enjoy the benefit of lower installment option.
While opting for a construction loan, many borrowers can opt for construction to permanent loan program. In this program, the construction loan is transformed into mortgage loan after issuing the certificate of possession. But by availing this option, borrowers need not pay for two loans. If your construction loan is transformed in mortgage loan, there will be one application and one closing.
Like secured loan, in case of construction loan, there is a possibility of collateral repossession. Since, borrowers need to use their residence as collateral, hence if the amount is not repaid, their collateral will be at risk. So, a sound decision is required before applying for this loan. In such cases, experts’ advice can be advantageous, which will guide you to choose the right option.
For assisting people financially in their construction work, the construction loan is customized. This loan is available for a short period of time. But in future, borrowers can convert this loan into mortgage. In case of coping up with sudden cash needs during construction work, the importance of this loan is unavoidable.
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is working as financial consultant for chanceforloans.To find a construction loan,debtconsolidation loan,cheap rates,personal loans,secured loans,unsecured loan that best suits your needs visit http://www.chanceforloans.co.uk
As a construction loan, a borrower can borrow the amount, ranging from £50,000- £2,000,000. These loans are mainly short term loans. The amount is repayable as early as borrowers complete the construction and the house is prepared to be dwelt in.
Based on the few factors, the interest rate of a construction loans is decided. These factors are as follows:
•The stage of construction works
•The agreement among all the parties, involved in this construction, like, borrowers, lenders and contractors.
But, in this context, one thing is necessary to mention. Since, these loans are offered for a short period of time, hence, the interest rate of this loan is a bit higher. Usually, the interest rate is available with adjustable and variable rates options. At the same time, the repayment option of a construction loan needs to be mentioned. Borrowers can pay off the amount with small interest only repayment. Due to this reason, borrowers can enjoy the benefit of lower installment option.
While opting for a construction loan, many borrowers can opt for construction to permanent loan program. In this program, the construction loan is transformed into mortgage loan after issuing the certificate of possession. But by availing this option, borrowers need not pay for two loans. If your construction loan is transformed in mortgage loan, there will be one application and one closing.
Like secured loan, in case of construction loan, there is a possibility of collateral repossession. Since, borrowers need to use their residence as collateral, hence if the amount is not repaid, their collateral will be at risk. So, a sound decision is required before applying for this loan. In such cases, experts’ advice can be advantageous, which will guide you to choose the right option.
For assisting people financially in their construction work, the construction loan is customized. This loan is available for a short period of time. But in future, borrowers can convert this loan into mortgage. In case of coping up with sudden cash needs during construction work, the importance of this loan is unavoidable.
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is working as financial consultant for chanceforloans.To find a construction loan,debtconsolidation loan,cheap rates,personal loans,secured loans,unsecured loan that best suits your needs visit http://www.chanceforloans.co.uk
วันพฤหัสบดีที่ 17 กันยายน พ.ศ. 2552
Getting a Construction Loan Vs A Mortgage Loan - Learn the Differences
Unless you plan to pay cash for your home building project, you will need to obtain financing for the construction and a mortgage for the outstanding balance when it's finished. While you may have qualified for a mortgage loan before, getting a construction loan for your home building project can be a little challenging.
Although it's certainly possible to get a construction loan as an owner-builder, lenders may shy away from you at first, thinking that you aren't qualified to handle such an undertaking. Consequently, it's important to be very prepared and to show yourself in a capable, competent light when presenting your case to the lender. For example, don't say, "I've never really done this before, but I'm willing to give it a stab." Instead, be positive, prepared and professional. Never lie, but anticipate questions and concerns and have answers ready.
There are several types of construction loans to choose from, but one of the most popular for people building their own home is a construction loan that converts to a permanent loan once the home is complete. Although there are no standard specifications for this type loan, as a guideline, most only require that you pay closing costs once. That saves some money and makes the process easier. You don't have to go through the qualification process twice. The downside is that it is next to impossible to lock-in a permanent mortgage rate, since you won't be closing the loan for six months to one year.
No matter what type construction loan you choose, you will likely be required to pay monthly interest on the construction loan amount during the construction phase. The amount you owe each month will depend on the amount you have "drawn" out of the loan, not the overall amount that you are allowed to borrow. If you are approved for a construction loan of $100,000 but you have only drawn $50,000 then your interest payment will based on $50,000. Typically construction loans are standard interest (not amortized) and are one or two percent over the prime rate, or whatever you have negotiated with your lender.
Qualifying for a construction goes beyond the income and credit qualification requirements for a standard mortgage loan. Bankers or lenders will want to know how you plan to tackle your project and that you are capable of building a home yourself. A thorough presentation to the bank will be in order. The following is an outline of what you will need to apply for a construction loan:
You might also consider providing any other documentation you can think of that will help indicate your ability and preparedness to complete your project. The bank is essentially becomes a silent partner in your project and will be concerned about the home being properly built. Demonstrating your ability to handle the project is key here.
Bill Edwards has built more than 200 custom homes over the last 30 years and has also helped many people build or remodel their own homes using his tested methods. He currently heads up American Home Counsel, a consortium of professionals in the home building, real estate, development, financing, and education professions. Their goal is to help educate people about home building, home remodeling, and home buying and selling. To learn more about home building financing, please visit: http://buildyourownhome.AmericanHomeCounsel.com
Although it's certainly possible to get a construction loan as an owner-builder, lenders may shy away from you at first, thinking that you aren't qualified to handle such an undertaking. Consequently, it's important to be very prepared and to show yourself in a capable, competent light when presenting your case to the lender. For example, don't say, "I've never really done this before, but I'm willing to give it a stab." Instead, be positive, prepared and professional. Never lie, but anticipate questions and concerns and have answers ready.
There are several types of construction loans to choose from, but one of the most popular for people building their own home is a construction loan that converts to a permanent loan once the home is complete. Although there are no standard specifications for this type loan, as a guideline, most only require that you pay closing costs once. That saves some money and makes the process easier. You don't have to go through the qualification process twice. The downside is that it is next to impossible to lock-in a permanent mortgage rate, since you won't be closing the loan for six months to one year.
No matter what type construction loan you choose, you will likely be required to pay monthly interest on the construction loan amount during the construction phase. The amount you owe each month will depend on the amount you have "drawn" out of the loan, not the overall amount that you are allowed to borrow. If you are approved for a construction loan of $100,000 but you have only drawn $50,000 then your interest payment will based on $50,000. Typically construction loans are standard interest (not amortized) and are one or two percent over the prime rate, or whatever you have negotiated with your lender.
Qualifying for a construction goes beyond the income and credit qualification requirements for a standard mortgage loan. Bankers or lenders will want to know how you plan to tackle your project and that you are capable of building a home yourself. A thorough presentation to the bank will be in order. The following is an outline of what you will need to apply for a construction loan:
- all the same financial information you would provide to get a standard mortgage loan (financial statements, income verification, credit report, etc.)
- a set of your plans (they may ask for several copies)
- detailed specifications (the materials and finishes you plan to use)
- an estimate of the cost
- an appraisal (ordered by the lending institution. The appraiser will use the plans, specifications and lot value to determine the amount)
- your lot information (whether you own it, etc.)
- contractor bids (not necessarily required, but might be if this is your first project)
You might also consider providing any other documentation you can think of that will help indicate your ability and preparedness to complete your project. The bank is essentially becomes a silent partner in your project and will be concerned about the home being properly built. Demonstrating your ability to handle the project is key here.
Bill Edwards has built more than 200 custom homes over the last 30 years and has also helped many people build or remodel their own homes using his tested methods. He currently heads up American Home Counsel, a consortium of professionals in the home building, real estate, development, financing, and education professions. Their goal is to help educate people about home building, home remodeling, and home buying and selling. To learn more about home building financing, please visit: http://buildyourownhome.AmericanHomeCounsel.com
วันพุธที่ 16 กันยายน พ.ศ. 2552
VA Construction Loans
Thinking of building a home and wondering if you can use a VA home loan for financing? If you are a veteran then you may have this option available and getting a new home built may be easier than you think.
Basic requirements:
• Serve or have served in the US Military, Reserves or National Guard
• Have an honorable discharge status
• Have qualified Service Time Requirements:
• 90 or more days active duty service during active wartime
• 181 days or more of active duty service during peacetime
• Currently active duty service and meet the 90 or 181 days requirement
• Non-remarried surviving spouse of veteran who died during service or because of service related injuries
• Are approved for your credit score and can verify employment
Additional guidelines for getting this loan in order to build a new construction home are:
• There must be a warranty on the home
• The builder being used must be a "VA-approved" builder-consult with a VA home loan specialist to find a VA approved builder
• Builder must posses Valid Va Builder identification number
• If your builder does not have a valid Va Builder ID # and you want the benefits of this loan, your mortgage professional can help get your builder approved.
• New construction must meet additional inspection requirements
• New home must meet accepted standards of good construction
• New construction must fit specifications and plans, which the loan appraisal is based on.
(The following 3 items must be filled out and submitted to VA prior to VA home loan notice of value being issued)
1. Builder information and certification form
2. Va form 26-421 Equal Employment Opportunity Certification
3. Va form 26-8791 Va Affirmative Marketing Certification
http://nobsvaloans.com/2009/06/va-construction-loans/
Basic requirements:
• Serve or have served in the US Military, Reserves or National Guard
• Have an honorable discharge status
• Have qualified Service Time Requirements:
• 90 or more days active duty service during active wartime
• 181 days or more of active duty service during peacetime
• Currently active duty service and meet the 90 or 181 days requirement
• Non-remarried surviving spouse of veteran who died during service or because of service related injuries
• Are approved for your credit score and can verify employment
Additional guidelines for getting this loan in order to build a new construction home are:
• There must be a warranty on the home
• The builder being used must be a "VA-approved" builder-consult with a VA home loan specialist to find a VA approved builder
• Builder must posses Valid Va Builder identification number
• If your builder does not have a valid Va Builder ID # and you want the benefits of this loan, your mortgage professional can help get your builder approved.
• New construction must meet additional inspection requirements
• New home must meet accepted standards of good construction
• New construction must fit specifications and plans, which the loan appraisal is based on.
(The following 3 items must be filled out and submitted to VA prior to VA home loan notice of value being issued)
1. Builder information and certification form
2. Va form 26-421 Equal Employment Opportunity Certification
3. Va form 26-8791 Va Affirmative Marketing Certification
http://nobsvaloans.com/2009/06/va-construction-loans/
วันอังคารที่ 15 กันยายน พ.ศ. 2552
Bad Credit Home Construction Loans
Bad credit home construction loans are specifically designed loans for people whose credit history has been damaged. These loans allow people with poor financial backgrounds the opportunity to build a dream house.
Before obtaining a bad credit home construction loan, the first thing you should consider is whether to approach a mortgage fund company or a bank. Many mortgage companies are able to provide a variety of bad credit home construction loans to suit your needs. Banks, on the other hand, are hesitant to entertain people with poor credit history. Several kinds of rate schedules, additional fees, and conditions are associated with these loans. The rates vary on the basis of mortgage sales, seasonal trends, and the reputations of the lenders.
The down payments on bad credit home loans usually range from 3% to 5%. Some money lenders do provide funding with a down payment of below five percent. Sub-prime lenders specialize in lending high-risk loans, especially loans to people with bad credit. To cover the risk, these lenders charge a higher rate of interest.
There are a good number of bad credit home construction loans programs for people with credit problems. These are quick loans to obtain and are valuable solutions for temporary financial problems. Lending companies focus on factors such as loan-to-value ratio, monthly income, and debt-to-income ratio before granting the loan. You can negotiate for more favorable terms.
An ideal solution to finding a suitable lender is to shop online, which will reveal the best lending rates for your particular situation.
Bad Credit Home Loans provides detailed information on Bad Credit Home Loans, Bad Credit Home Equity Loans, Bad Credit Home Improvement Loans, Bad Credit Home Mortgage Loans and more. Bad Credit Home Loans is affiliated with Bad Credit Home Equity Loan Refinancing.
Before obtaining a bad credit home construction loan, the first thing you should consider is whether to approach a mortgage fund company or a bank. Many mortgage companies are able to provide a variety of bad credit home construction loans to suit your needs. Banks, on the other hand, are hesitant to entertain people with poor credit history. Several kinds of rate schedules, additional fees, and conditions are associated with these loans. The rates vary on the basis of mortgage sales, seasonal trends, and the reputations of the lenders.
The down payments on bad credit home loans usually range from 3% to 5%. Some money lenders do provide funding with a down payment of below five percent. Sub-prime lenders specialize in lending high-risk loans, especially loans to people with bad credit. To cover the risk, these lenders charge a higher rate of interest.
There are a good number of bad credit home construction loans programs for people with credit problems. These are quick loans to obtain and are valuable solutions for temporary financial problems. Lending companies focus on factors such as loan-to-value ratio, monthly income, and debt-to-income ratio before granting the loan. You can negotiate for more favorable terms.
An ideal solution to finding a suitable lender is to shop online, which will reveal the best lending rates for your particular situation.
Bad Credit Home Loans provides detailed information on Bad Credit Home Loans, Bad Credit Home Equity Loans, Bad Credit Home Improvement Loans, Bad Credit Home Mortgage Loans and more. Bad Credit Home Loans is affiliated with Bad Credit Home Equity Loan Refinancing.
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