Hummmm…..how about some money to cover the cost of
construction – commonly referred to as "interim financing".
This could be an easy step or it could become a total
bummer. We happen to have an employee credit union that furnished our interim financing
for us but, we went to many banks and financial institutions trying to get interim
financing before one of our friends suggested we try the credit union. Needless to say,
none of the other financial institutions were interested. I will grant that it was a rough
time for the economy about then but still, it was a very frustrating and disheartening
time.
If you are not familiar with interim financing and the
various requirements, be sure you sit down with someone and find out just what it is, how
it is used, and what is required of you. Some of these items will depend on your lender.
Another stumbling block here may be your desire to be
your own contractor. Unless you are extremely well known to the loan manager and have a
good track record with them, they may not even consider financing an owner-built home
during the construction phase. They may also have regulations that require a licensed
General Contractor on the contract.
One other thing you really should know before trying to
secure financing, they will want to see a complete set of plans which they will send to an
appraiser for an estimate on the cost to build. This is something that you should also do
prior to requesting your loan. If your income is sufficient to secure a loan of say
$60,000 and the appraiser estimates the cost of construction at $80,000, that leaves a
difference of $20,000 that you will have to show as cash on hand.
Talk to a few builders and find out what the average cost
per square foot is in your area. This will give you some idea of the cost of building your
dream home. I have some links below to various financial sites on the web that may help
you with some of this chore.
Now let’s get on with the show!!! Click on "Construction"
