How to get a construction loan in this new economy

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Created on Monday, 24 March 2014

"I want to build a home, but can't get a construction loan. What should I do?"

Many banks have gotten out of construction lending, or are charging very high rates when they make a loan.  Banks have gotten burned.  Regulators keep regulating.  They now require banks to keep larger loan-loss reserves, and are further diminishing the lien rights of banks in foreclosure situations.  So what's a qualified borrower to do?

Answer: find an long-time, established local builder who survived the downturn, and has good relationships with at least one local bank. Chances are that that bank will make both a construction loan and an end loan in a pre-sold situation, because of their good relationship with the builder.

 

 

 

 

10 Things You Need to Know Before Comparing Costs per Square Foot

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Created on Wednesday, 19 December 2012

Cost is driven by design.
Sophisticated rooflines and grand entryways add cost but not square footage. Simple rectangular foundations reduce a home’s square foot cost compared to homes with numerous foundation jogs. Carpet typically comes in 12’-wide rolls, so designing a bedroom 12’-8” wide is expensive due to the added labor (cutting and seaming the carpet) and increased material waste. Tall, tiered or vaulted ceilings and artful ceiling details increase the cost per square foot compared to homes with 8-foot high flat ceilings.Then there’s the cost of the home plans. Predrawn plans might cost $1,000, about $.50 per square foot for a 2,000 square foot home. Custom- drawn plans typically range from $2-$10 or more per square foot.

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