New home construction loans

[murdoc]

My wife and I are looking at building a new home.  Anyone want to recommend a financial institution that can make this happen.  I would like to do a construction-to-permenant type loan if possible.  How are the interest rates looking?  Thanks, Jason

[Tom Snyder]

Don't know if you've picked your builder yet, but I gotta put in a plug for Miracle Homes... watch for their no-money down and no payments till occupancy program. We thought there had to be a catch, but the only money you have to put in is a scheduling fee of $4500 to keep the project moving along from signing the contract to closing on the actual construction.. and you get that back when the construction loan closes. You apply for the construction loan, but Miracle Homes makes the payments on your lot and construction draws till you get occupancy.  You can then roll it over into a permanent mortgage.

The other cool thing is that in addition to a ton of upgrades inside for next to nothing, they also offer 50-75% off shopping sprees at American (makes for some sweet prices on a new Plasma TV for that new home).

They don't run it all the time, but they do it frequntly enough that if they're not doing it when you're ready... just wait a few months. And maybe while you're waiting they'll do a promotion that appeals to you even more, like giving you a finished basement for $1999.

We built our first home with them... and we're doing it again... and will do it again in a couple years.

If you decide to go with them, ask for Paul Esser as your salesguy and tell 'em I sent ya.

P.S. If you've picked your builder, and just need a loan, talk to Barb Gevaart at USBank mortgage.. call any branch and they'll get you in touch with her. She got us financing at a time when nobody else would touch us. She'll bust her butt for ya!

P.P.S. Tell Barb I sent ya, too.

[picopir8]

We built our first home with them... and we're doing it again... and will do it again in a couple years.

Who, how often do you move!  I moved into my present home about 3.5 yrs ago and it seems like yesterday.  I cant picture moving for at least another 3-4 years.

As for homes, I have no input.  I had my last home build but discovered that no matter how much money you put into construction, you cant get the charm of an older home.  So I sold it and purchased a 90 yrs old home.

[Tom Snyder]

Part of our retirement stategy is to build, decorate, landscape and sell. Then do it again... and again...rolling your equity over into the new one each time. If you wait two years before you flip it, there are no capital gains taxes. If you do it right, your fifth house will be completely paid for when you move in. Building gives you significant instant equity, but few people do it because doing all that work just to leave it behind and do it again doesn't appeal to a lot of folks.

We're just crazy enough to do it.

[Doug Mohr]

I had my last home build but discovered that no matter how much money you put into construction, you cant get the charm of an older home.  So I sold it and purchased a 90 yrs old home.

Amen Brother!  My house will celebrate its 132nd birthday this April!

I gutted and redid mine (historically accurate). Its great to have the modern technology and old time quality. You just can't beat a balloon framed house that uses 3x6s for the exterior studs  :guitar:

Doug

[murdoc]

Don't know if you've picked your builder yet, but I gotta put in a plug for Miracle Homes... watch for their no-money down and no payments till occupancy program. We thought there had to be a catch, but the only money you have to put in is a scheduling fee of $4500 to keep the project moving along from signing the contract to closing on the actual construction.. and you get that back when the construction loan closes. You apply for the construction loan, but Miracle Homes makes the payments on your lot and construction draws till you get occupancy.  You can then roll it over into a permanent mortgage.

The other cool thing is that in addition to a ton of upgrades inside for next to nothing, they also offer 50-75% off shopping sprees at American (makes for some sweet prices on a new Plasma TV for that new home).

They don't run it all the time, but they do it frequntly enough that if they're not doing it when you're ready... just wait a few months. And maybe while you're waiting they'll do a promotion that appeals to you even more, like giving you a finished basement for $1999.

We built our first home with them... and we're doing it again... and will do it again in a couple years.

If you decide to go with them, ask for Paul Esser as your salesguy and tell 'em I sent ya.

P.S. If you've picked your builder, and just need a loan, talk to Barb Gevaart at USBank mortgage.. call any branch and they'll get you in touch with her. She got us financing at a time when nobody else would touch us. She'll bust her butt for ya!

P.P.S. Tell Barb I sent ya, too.

Well the lot were looking at, the lister is offering lot/home packages.  They are doing custom homes and I've been going over floor plans like crazy.  Opps, here's a few more....  

The Miracle Homes deal sounds SWEET!  I will look into it.  If we can get the lot and have them build I may just go for it.  Hopefully the estimate will be on par with the other construction company, so we can really have those bonuses pay off for us!  Thanks Tom!

[AndrewP]

Part of our retirement stategy is to build, decorate, landscape and sell. Then do it again... and again...rolling your equity over into the new one each time.

Those days are almost over.
This strategy worked well but now you should be very careful.
William Ryan Homes also have turn key plans lik Miracvle Homes, they are good too.
Select th model you want first.

[Doug Mohr]

Those days are almost over.
This strategy worked well but now you should be very careful.
William Ryan Homes also have turn key plans lik Miracvle Homes, they are good too.
Select th model you want first.

I've heard issues with Ryan after a few years. Quick construction and wet lumber leads to settling, cracking, and hard to open doors and windows.

I would stick with only Miracle homes as an option.

It is hard in the Midwest to find any good home builders. The midwestern "good enough" additude is very disturbing to me. I watch some of these new houses being built and I just cringe at the shoddy workmanship and corner cutting.

Today it is all about big spaces and fancy floorplans. No one seems to care what is underneath.

Doug

[Tom Snyder]

Those days are almost over.

While the market may be cooling a bit, I wouldn't give up on the strategy for the following reasons:

The "Housing Boom" is really a Red Herring... There are a few markets where housing values are just nuts, but overall, housing values  really have done nothing but keep pace with inflation over the past 30 years. The low Mortgage rates over the past few years just allowed us to catch up , and that "catch up" looks like a boom. Unless mortgage rates go through the roof, the appreciation will still continue, but at a lower level than what we're used to.  We won't see 13% annually, but we will see 8-9%... Lot better than a Money Market.

Despite the Feds' escalating interest rate increases, there is still a ton of foreign money coming into the mortgage market. That's why the 30 yr. rate goes up a bit when the Fed bumps the rate, but then it slides back down...  They're still not bad, and once the Fed stops raising Prime, they'll go down some more.

Because most people have no interest in going through the building hassle, you get $30-40k in instant equity the day a new construction is move-in ready (Although our current hassles with Dittmar Realty's blatant misrepresentations while they were trying to SELL us a lot, and their borderline OCD architectural control now that we own the lot could be enough to scare away even the most courageous).  Bottom line here is make sure you know who you're dealing with for the lot... and avoid Dittmar Realty subdivisions ...period!

But that first bump is easily the largest appreciation you'll get (and $30k for 6 months of some extra effort ain't bad...especially if your builder is making the payments for you)... the two years you spend landscaping and decorating will appreciate the value nominally (but if done right will decrease the time it takes you to sell the place down the road), but by avoiding the capitol gains by keeping it for two years makes up for it.. and besides.. ya gotta live somewhere.

So it's still an OK strategy, even if you have to wait till your 6th house to be the free one.

P.S. Did I mention not buying a lot from Dittmar Realty?

[StarvingForHDTV]

P.S. If you've picked your builder, and just need a loan, talk to Barb Gevaart at USBank mortgage.. call any branch and they'll get you in touch with her. She got us financing at a time when nobody else would touch us. She'll bust her butt for ya!

P.P.S. Tell Barb I sent ya, too.

I tried calling a couple of branches, but nobody would tell me where to find Barb.  If you have her phone number, that would be helpful.

[Tom Snyder]

Try her at 262-650-3804 or 262-966-0762

Tell her I sent you.

[StarvingForHDTV]

OK, thanks for the recommendation.