Construction Loan Article Center
Tuesday, July 18, 2006
Your next step would be to find a licensed architect. This may be as simple as asking friends, family and others in your community for recommendations. If you see a new house you like, don't be afraid to ask the owner for the name of the architect who designed the home. Or you could check with the city, which keeps sets of plans on file for all new construction.
While the architect's fee is one consideration, it shouldn't be the only consideration in selecting your architect. A good architect may actually save you money by offering design and materials alternatives and energy-efficient features. Additionally, an appealing design has an important effect on your long-term investment. It will add to your home's value as well as provide a comfortable and pleasing environment for you and your family.
Once you've selected your architect, remember, you're now a team. You're paying an expert to interpret your dream with style and utility. So talk freely to your architect about what you want and don't want in your home. Make sure you provide information about the size of your family and any intentions for growing that family. If you have unique furnishings you want to showcase and need rooms of a certain size or type, be sure to tell your architect. Look at the plans with both your head and your heart.
If you don't love what you see-or the plans would require you to change your preferred lifestyle-rethink them with your architect's help. Remember, you have the final word. But listen to your architect's suggestions and evaluate them as they pertain to your own tastes and needs. If you don't like something in the preliminary drawings, speak up. It is far easier and cheaper to make changes before the drawings become final plans, or worse, a completed house!
This is also the time to start saving/filing all your receipts. Depending on your equity position you may be able to finance the cost of the architectural and engineering plans within your construction loan.
Architectural fees are a part soft costs of construction and as such may be included in the construction loan budget and, loan amount allowing, may be reimbursed to the borrower.
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Yes. This can be done through a lot loan. A lot loan gives you the opportunity to take your time in selecting an architect, builder and designer for your dream loan. Lot loans are short-term financing that allows you to purchase a lot for future construction. Construction Loan Center has lot loan programs that will allow you to finance up to 50 acres. Once you are ready to begin building your dream home, you can obtain a construction loan that will pay off the lot and allow enough funds for the construction.
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Sunday, July 16, 2006
There are a few other considerations to be made. Look around at the available finished lots and try to determine build ability. You will need land that has a build able pad, uncontaminated soil, and an area where the city or county will allow you a permit to build the size and type of home you would like. A site that was previously used for a gas station or dump may contain soil with toxins in it. The same may be said for a site once used as a commercial property in which case you may need a soils engineer to test the site. It is once again important to have an experienced real estate agent or title company officer in order to assist you in deciding whether or not it is necessary to do a soil study. The seller may already have a full report on the site in situations where the property is located in a new community.
The grade level, or slope of the parcel is another element of the land that needs to be considered. Property located on a hill may require more extensive and costly work on the foundation and structure in order to make it build able. In this sense, although a location on a hill may offer a nice view and increase the property value the cost to build is higher as well.
Don't forget that a construction loan is based on future value, so check the area carefully for recent sales data and make sure you are not overbuilding for the area. The final consideration, lot size, is a decision specifically for you, the homeowner, to make. It is important to consider not only that your lot is large enough for your dream home, but also the amount of time and money you will spend on the yard. For example, if you like to entertain outdoors and do yard work or on the other hand if you dislike yard work this may factor into your decision of lot size.
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The answer is yes. Although some cities may already have things such as parks, schools and streets, newer communities built within this same city may have special assessments, or "piggy-back" assessments. These piggy-back assessments can cover the costs of development or maintenance for new or existing parks, schools and/or streets, for example. These assessments can either be short term or indefinite. A good real estate agent or title company officer will be able to provide you with this information.
In calculating the tax rate for a construction loan application, a standard rate is used for that state. For a California Construction Loan the rate used is 1.25% where as for most other states 2.5% of appraised value is used. Should the higher theoretical rate effect the qualifying, then a lower rate may be used based on a written estimate of the particular county's tax rate from that county
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