Does anyone have information on obtaining a self build mortgage? I own land in the country and I need a mortgage for the building materials.
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Good luck! Convincing banks to loan money to an owner/builder appears to not be an easy task.
Here's a couple websites that MAY be of some help.
http://www.ownerbuilderloan.com/download.htm
http://www.ownerbuildercenter.com/index.html
Jon
As previously stated, it can be difficult to obtain a loan to build your own house, especially if you don't do it for a living.
You do have something going for you, and that is you own your land. It's value toward the project, as well as any cash you can inject up front, are 2 big determining factors of your liklihood to get a construction loan. Other advice is to make sure you can convince your lender that you are capable of building it yourself (or at least contracting it out) and that you have the time to put into the job.
The first would be accomplished by mentioning any experience that you have in construction. Also, have your ducks in a row before you go in and waste their time. This means plans, a detailed cost estimate, )with copies of any bids that you obtained to back the cost estimate up if the lender asks for it) and a description of materials list (details the quality of the items that you will install)
The second item would be accomplished by mentioning that you work the early shift and you're off at 2 pm everyday so that you will be able to go out to the site every day, or that you're a teacher and you will have all summer off, or you're self-employed and can focus some extra time that way, etc.
Of course, take all necessary financial information with you when you return the filled out loan application. This means tax returns for at least 2 years, (maybe 3 if you're self employed) paystubs, copy of a HUD settlement statement if you just sold a house so that they can document where your down payment came from, and copies of bank statements showing your liquid assets, and any recent statements from any investment/retirement accounts. (to help show your stability)
Also, don't give up if you get turned down the first time. Lenders are all different, as are banks. If you're not getting anywhere with banks, you might try a mortgage broker, although they usually don't handle construction loans, but they might refer you to another source.
Good luck.
Boy, this is the exact opposite of my experience. You said
"You do have something going for you, and that is you own your land. It's value toward the project, as well as any cash you can inject up front, are 2 big determining factors of your liklihood to get a construction loan. Other advice is to make sure you can convince your lender that you are capable of building it yourself (or at least contracting it out) and that you have the time to put into the job. "
I contacted a bank, and they said since I already owned the property, they couldn't lend me any money. If I were to buy property with intent to build, they would have lent me money to buy and build, now they won't do either. go figure.
When I self-built my house, I had minimal experience in construction.
I couldn't get a loan from any bank in the area.
I ended up asking the realtor that I used when I was house/lot hunting for a reference for a broker. For a point, the broker got me a construction loan with a bank that had previously turned me down.
The loan was a typical construction loan...adjustable rate up front during construction, converting to a 30-yr fixed. One closing up front, 12 months to get the C of O, 4 draws on the loan. I got the draws upped to 8.
Got the C of O after 11 months and 6 draws. While I hated doing it, the cash for that point for the broker was one of the the best investments I ever made.
Thanks for the info. Did you build your house or were you just the general contractor?
"Self-built"...I swung the hammer.
Broke out the chainsaw the day the loan closed and played "brazilian rainforest guy." Cleared a little over an acre on a 2+ acre lot. I subbed out the excavation, foundation, septic, and well. I put in three runs of trenched conduit from house to street (560' trench) for electrical, phone, and a backup conduit.
Did all the framing, roofiing, windows, siding, trim.
Subbed out the chimney (3-flue) and fireplaces.
I did the electrical, plumbing, DWV, radiant floor heat. Hired a guy to install the oil burner and do the black pipe work associated with that.
I did the insulation. Subbed out the drywall. Put 5/8ths everywhere. I was smart enough (and tired enough) to know that hanging, taping and mudding 240 twelve foot sheets of 5/8ths board would have done me in.
I installed about 3100 sq ft of brazilian cherry flooring, a few hundred feet of stone flooring (foyer, etc), and tiled the baths.
I built the stairs, built all the cabinets and doors, did the finish electrical and plumbing. Made my own concrete countertops, teak countertops, too. Kids rooms have built-in closets and totally cool platform beds.
Painted.
Trimmed out. Actually, I'm still trimming out.<g> All rooms with wainscotting, varying styles. Between 4 and 6-piece crown. Big-#### baseboards.
Did all the landscaping. Grass lawns, built several hundred hundred linear feet of square picket fence from stock materials. I've wheelbarrowed about 55 tons of stonedust and laid about 1600 sq feet of bluestone patio.
I was told when I moved here that air conditioning wasn't needed. Man, were they wrong. Put in in afterwards, subbed it out, but did a fair amount of the work myself.
I'm tired. Dang. I deserve a beer.
You deserve a couple of beers. I have a ton of questions for you. Should I ask them here or use your personal e-mail. I plan to build my own house in about 18 months from now.
Taunton only allows three pounds of questions per post, so if you have a ton, it may be best to fire them off via email.
DH is the GC on our house, and we are doing a lot of the work ourselves. Our loan is through a major, national, lender and they required both a form and a resume for this. We were worried that the bank would not approve him, but then when we started putting everything down paper, it turned into 3 pages. The "corporate office" approved within a couple days!
In all fairness, DH is in the construction industry and has been for a while as a materials tester/inspector and now as a construction manager type for munincipal projects, but not really much residential so we also included things like remodeling our own house (remodel is much too mild a word for what we did to that house!), and a project he did restoring an 1800s schoolhouse. I guess they thought it was fine and approved.
I say, it doesn't hurt to try, unless you don't have any construction experience, and then you might be in trouble. Also, having gone through this, I don't think you really want to take on building a house without construction experience. That sounds daunting to say the least!
I think the key is to keep trying and even try places that you think would not be interested. As I said, our loan is through a large, national bank (Bank One) and their loan has been very flexible and the terms easy to live with. For example, there is no limit on draws, standard loan length is 12 months, interest rate was OUTSTANDING (5.5%) and they didn't even bat an eye at a log home. I would have never expected that from a bank like that.
My wife and I did it, too. We had paid about half on an owner financed lot. I'm a carp and do design work , we had prints and cost estimates, draw scheduals, subs, and had already started grading the lot out of our pockets. We started with mortgage brokers (I'm not sure why), and one said let's talk. I think we paid him a point, too, and he hooked us up with a local bank. We set up a construction checking and credit card account with them. Great for draws, just call in, it was done. Got it built in the reqired year, went back to the broker, he gave us his terms which came up in a chance conversation with our construction loan officer at the bank. Long story short, the broker was trying to jerk us around and the bank was a much better deal, with other benifits...and we lived happily ever after<G>
Best of luck It's okay, I can fix it!
One other thing you need to consider is insurance. I managed to get a local bank that used local money and did not need to meet Fannie Mae requirements to lend me the money but almost lost the deal because of insurance. Builders risk was required by the bank. I had to convince the insurance Co. that I knew what I was doing. Several ins. co's turned me down.
What insurance company gave you coverage? Thanks
Try doing a search for Country Wide Mortgage.
http://www.203k.net/loans/construction/fhaconventional/
I know we can't believe everything that's on the internet but it looks like they have a lot of interesting products.
Eric
Go for it!!!! I've been planning my home for years and plan to start contracting late January. Yes financing was a problem here in Texas, but I was able to get around it by using interim financing provided by my lumber supplier, MG Building Materials. They in turn roll the mortgage thru Excell Mortgage. They were very competive on price and terms. You don't mention where you're building, but I would check with some large lumber suppliers in your area to see if they offer a similar program.