Archive for July, 2009
Home Construction Loan Finance
July 3rd, 2009
Question: it seems like none of the builders i speak with own lots the only?
ones that do are "cookie cutter" builders and i dont like their homes. what do i do now i have to go and try and buy a lot with no money and then finance a construction loan on top of that? this is nuts. are there any other ways?
i own a lot but its too small for what i want so i dont really want to build on it but it looks like we'll have to
Answer: Whenever we have built a "custom" home, we have always purchased the lot, found the plans and then hired the contractor.
Most development companies are cookie cutter because they can buy in bulk, it saves on the designs AND the builders know the floor plan. Building a custom home is going to generally be more expensive.
Some builders will customize the cookie cutter floor plan for you if you talk to them, but because of HOA's, the outside will need to be within the guidelines.
I would consider taking some of the money you would use for a down on a home loan and purchase the lot. PRIOR to the actual purchase, get quotes on building the home of your dreams on the lot. Take any quote you get and add 10-20%. Trust me, when you start building you will want to change just one little thing... It happens every time. Then when it comes time to build, see if you cannot do some of it yourself. You will be surprised at how easy it is to tile and install fixtures. If you have friends who do electrical, painting, plumbing, ask them if they can help you out. Do expect them to do the labor for free, but see if they can cut you a deal. (Offer lasagna, it is always a good bribe for me!)
Good luck!
Home construction Loan Finance
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Inside Mortgage Finance
July 1st, 2009
Question: Should I sell or refinance with little to no equity?
I own a condo, and because of 2 unexpected job layoffs, my career has taken me to another town, & do not plan to relocate back. I currently rent it out, but my renters plan to move at the end of summer & are not interested in buying.
I bought the place in early 2003, and financed it 100% through the creation of two mortgage accounts---70% is on a APR loan currently at 5.75% and the rest is on a high (8.25%) fixed rate. The variable one kicks up next year to a higher rate.
To make matters worse, the property has not risen in value at all in these last five years. The property is in a decent area inside I-285(Atlanta) & there is a chance that a nearby mixed-use development project is going to happen, so perhaps the value might go up a little in the next couple of years.
But can I afford to hang on, or should I go ahead and sell, knowing that I may have to shell out a few thousand to unload it, or would I be better off refinancing and re-renting it for a few more years?
Answer: Very very hard question here. I personally would cut my losses now and sell and get out of that variable. However, if the amount you owe could be rolled into one 30 year fixed at the current rate of 5.5%, then you could try to hold on for the equity and a profit at sale. Renters are such an iffy prospect as fully 10 % of every group trashes your property. As you are an absent landlord your chances of that are higher and then you lose again. I personally would sell in your situation.
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