lori n asked:
We own an older mobile home on a little over 4 acres. We have recently had water damage to our home and it has to be condemned. The insurance company is not paying up so using a settlement is not an option (as of now). We are looking to get a new construction loan to build and I want to keep cost low. My father does excavation and will do all the work needed for the job. A friend of ours is a plumber and is doing that work at the cost for materials. I also have a small crew of contruction workers (4 or 5 family and friends) who are willing to put up their weekend hours to help to the job. Along with a brother in law for siding (free). We were going to pay for the foundation out of pocket, along with material cost for the plumbing and of course my father doing the excavation. I tld a mortage broker my plans and she told me not to do anything. WHY? Wouldnt it be better to get what I can get done first then ask for a loan? We still owe 46,000 on the property, and I dont want a mortage….
that we cant afford. Income is $50,000/yr
also the general contractor told us that it would look good to the lenders if we had help to cut cost.
Jeffrey
We own an older mobile home on a little over 4 acres. We have recently had water damage to our home and it has to be condemned. The insurance company is not paying up so using a settlement is not an option (as of now). We are looking to get a new construction loan to build and I want to keep cost low. My father does excavation and will do all the work needed for the job. A friend of ours is a plumber and is doing that work at the cost for materials. I also have a small crew of contruction workers (4 or 5 family and friends) who are willing to put up their weekend hours to help to the job. Along with a brother in law for siding (free). We were going to pay for the foundation out of pocket, along with material cost for the plumbing and of course my father doing the excavation. I tld a mortage broker my plans and she told me not to do anything. WHY? Wouldnt it be better to get what I can get done first then ask for a loan? We still owe 46,000 on the property, and I dont want a mortage….
that we cant afford. Income is $50,000/yr
also the general contractor told us that it would look good to the lenders if we had help to cut cost.
Jeffrey
Francisco
Actually the insurance money if any will go toward the mortgage, and the bank will get it.
As long as you make payments the bank may go with you. but they will still hold mortgage to your house as it is on the property they hold the mortgage.
Building without additional loan is good.. Have done that and live in a great house that we designed and did almost all the work… Good luck
Lewis
You can’t get a construction loan on a project that has been started. The reason for this is that the previous contractors (in your case friends and relatives) can place a lien on the property for non-payment. The lender can’t risk this so it’s not something they will lend on. You will want to first find somebody that still does construction loans (many companies stopped doing them recently) and they will want plans, estimates, appraisal (which they will order). Once they approve the loan they will pay off the $46,000 so that they are in first position. They will disburse monies for materials and labor as it is billed. Meanwhile, you pay only on the money used rather than the full amount. Once construction is done you will need to refinance that loan into a permanent 30-year type loan.