Building a House

[David]

How does this work? Do I get financed for the amount ahead of time or do I get financed for a certain amount and then pay the difference out of cash in my pocket for total price of the build?

Bought a few houses, but never built one.

[8mpg]

Depends... sometimes the builder will hold the note until the property is done. If not, you finance through your bank will work with the builder and release payments as you make progress on the house.

[bcoop]

Home construction loan

[David]

Depends... sometimes the builder will hold the note until the property is done. If not, you finance through your bank will work with the builder and release payments as you make progress on the house.

Do banks say who and what you workd with if they're financing the entire thing?

[juiceweezl]

Do banks say who and what you workd with if they're financing the entire thing?

No. You secure a construction loan as Brent said. First it'll be against the value of the property, and you can begin. The rate won't lock until the house is finished though.

[YALE]

Need a good architect?

[David]

Need a good architect?

Probably! Hopefully I'll be geared up to seriously get rolling come spring. Big garage is a must and I'm not finding that with already built houses.

[YALE]

PM sent.

[dcs13]

Do your research. I've heard tons of horror stories about people and their builders. Get a contract in writing. If you're getting the money, be careful how you ewstablish the draft structure for the contractor. NEVER EVER allow them to draft money without you approving it.
I'm sure you will get a lot of suggestions from guys here. Just do your homework. It can got to heck real quick.
My builder was great. He's a fireman and did home construction as the side business. House is awesome, even after 15 years. I was on site everyday to check on stuff. they never had a problem. Gonna build another soon, but I'm going to be the general on that one.

[STANGGT40]

I can get you with my bank, if you don't already have one that you're dealing with. There's a lot to it, but the short answer is that you put together a budget (if you're using a builder, he'll take care of this...if not, I can send you one that I used), then you go over everything (specs, etc)with your banker...they'll do a pre-appraisal, to make sure that the house is going to have enough value to support the loan amount, then you get a short term construction loan (if I recall correctly, they'll finance up to 80% of the pre-appraisal amount). You basically turn in invoices for draws on the loan (you pay monthly interest payments on the outstanding amount) and refinance into a mortgage once everything is complete.

[SVT Lurch]

Do banks say who and what you workd with if they're financing the entire thing?

No. You secure a construction loan as Brent said. First it'll be against the value of the property, and you can begin. The rate won't lock until the house is finished though.

Yes. The bank must approve the builder before they will work with them.

[Broncojohnny]

I'm getting two loans right now for development deals that are $30 million each and I honestly think it is much harder to get one for your own home.

[David]

Building a House

I think my biggest concern with financing is that I have 6 mortgages open right now. I have cash in the bank and the mortgages being paid timely, but my actual monthly/yearly income doesn't make it appear I make a whole lot right now. I'd rather keep the money in my bank, than dump a bunch into a "down payment" because I can't get a good rate or financing at all.

[8mpg]

I think my biggest concern with financing is that I have 6 mortgages open right now. I have cash in the bank and the mortgages being paid timely, but my actual monthly/yearly income doesn't make it appear I make a whole lot right now. I'd rather keep the money in my bank, than dump a bunch into a "down payment" because I can't get a good rate or financing at all.

I believe you have to show two years rental income for the other mortgages not to count against you.