Buildnet

Designing For Reality We all have our ideal home sketch tucked away somewhere, if only in our minds. If you find yourself driving around looking at vacant lots and touring new homes then maybe you are ready for the next step. Building your own home is challenging and fun. The first step is determining what you can afford. Some lenders or builders will push you to borrow the most you possibly can and convince you that you can afford an even bigger dream. In the construction world, that approach could easily backfire. The cost of building your ideal home is really just the start. Until you have a full picture of the associated issues, including everything from topographic surveys and septic systems to permits and contingency budgets (oh yes) you would be wise to be a little more conservative--at least in the paper stage. Now that may sound a little odd coming from a lender. When you've been on both sides of the table, you know it might be nice to have a little left over to furnish ...

So what does a homeowner seeking a custom home do these days? You get your own financing and let your financing bank manage the process for maximum results! OTC or Custom Perm is two step loan consisting of construction (term) and permanent financing (perm) combined into one transaction. This allows you to reduce your expenses to one set of costs usually associated with two closings. Until recently, it was more common for your builder to obtain construction or interim financing to build the home and then market it. Since so many builders found they could not sell their homes in a declining market, very few builders are proceeding using this model as banks have been forced to reorient how they handle construction projects. What about Spec Loans? Spec loans are for Builders who are financing their own project to sell. During the housing crisis, many Spec Builders and Lenders got out of the business altogether. In this scenario, after the home is built,...

What, are we crazy to suggest such a thing? Nope. Actually, like a good market contrarian , we can list a few very solid business reasons to build NOW. 1. Architects and Home Designers are either totally slammed working on major renovations for their top clients who may have decided to stay put or age in place... or extremely grateful for a nice plum ground up custom design to work on. 2. Builders are largely under-employed right now, so you will enjoy a choice of builders who are more willing negotiate your price and expect fantastic service. 3. Borrowers with high credit scores (720 or better) and sufficient assets to back up their project will have banks falling all over themselves to assist a custom project. 4. Builders can forget funding their own spec or custom homes (unless their client is taking on the financial risk) so you, Mr or Ms. Borrower will have all kinds of respect and control of your custom project coming your way. 5. Land values have plummeted due to the lack...