Help decide equity finance options for construction
hsk14
4 years ago
Featured Answer
Sort by:Oldest
Comments (16)
Mark Bischak, Architect
4 years agolast modified: 4 years agohsk14 thanked Mark Bischak, ArchitectRelated Discussions
Finance options for remodel
Comments (12)True, with $150.000 equity we own a little under half of our house right now. Floor choice is currently wood look tile throughout first floor (1500sqft), we dont know about the second floor (1000sqft) yet. For the kitchen no relocation of sink/gas/water for fridge, they're supposed to stay where they are. Also no new appliances needed (all bought within the last two years). We have an L-shape with an island (one leg 85"x25" countertop size, other leg 99"x25" and island with sink 37"x116). That makes roughly 62 sqft of countertop space, for which we want to have quartz. Cabinets are supposed to be white shaker, soft close and under cabinet lighting for the upper cabinets. One thing I do want to have is a farmhouse sink. Now for the wall tear down: it's not a load bearing wall, however we don't know if there are water lines in this wall. The windows are supposed to be double pane vinyl windows. We have about 17 windows (small bathroom windows to large living room windows) plus 6 accent windows (no idea what the proper name is) high in the living room wall. Our estimate of 80k was put together like this: - 30k for kitchen - 20k for floors (just first floor, second floor still up for debate) - 20k windows - 10k for wall tear down Are we totally off here? We're both diy affine, so could take on parts of the work (removal of old floor, tearing down wall, if no lines in there, baseboards, taking down and then installing kitchen cabinets, etc) The thing is, I'm not quiet sure if we should get estimates first and then talk to the bank or go to the bank first and see what financing options we have with which amount. Thanks all for your input so far and yes, I know that HGTV is not really realistic :)...See MoreConstruction Financing Question - Builder Financing
Comments (19)The OP risks his funds paid for the lot (and the lot too) if he deeds the lot to the builder and the builder is unable to finish The OP says, "One builder, who does a lot of spec houses, it looks like, said that his company would buy the lot, not us, and we would have the usual construction contract for a house that his company would build." Even if that were not the case it wouldn't necessarily be a problem. While not a common arrangement it isn't uncommon either, you just use an addendum to modify the quitclaim during breach or at the termination of the contract. Commonly the builder will accept a contingent quitclaim such that the deed only transfers if the buyer refuses to make final payment. It really isn't that unusual and I can't see any situation that an attorney would let you get into the situation you are suggesting. -------------- ETA: I did an addendum for a quitclaim on some property. I have a farm in an area that requires 10 acres to build (they are attempting to keep the area horse farms). We wanted to give the foreman an acre to build a house close to the farm. So we sold him one acre and quitclaim nine more, attaching an addendum that the quitclaim would reverse in two years unless he paid us a fortune....See MoreCan't decide on windows for new construction. Please help!
Comments (16)I agree wholeheartedly with the concept of not skimping on windows, however the specific recommendation of that builder may be a little misguided IMO. We replace Pella's in age range of 10 years +/- on a regular basis for one. Secondly, vinyl is not a bad choice based on performance or durability. In fact, a high end vinyl product would be an excellent choice in that regard as thermal and structural performance ratings would indicate, HOWEVER, that just may not fit the look that you are going for with all of the wood in the home. I'd suggest something with a stainable interior to keep the theme. The Marvin Integrity with wood interior would be a nice choice, in fact I think that would be a really good fit. It's one of the more durable products on the market with a real wood interior. The Provia Aeris would be worth consideration as well. Both windows are primarily constructed of fiberglass and vinyl respectively, with a wood veneer (actual wood 1/4 to 1/2", not contact paper) on the interior side. Both would typically be priced more reasonably than that Designer series and by a fair margin. Lastly, I believe that triple pane is well worth the cost in colder climates as well. Definitely worthy consideration if the product that you choose has it available....See MoreUsing Land as Equity for Construction Loan
Comments (15)Schedule an appointment to talk with the lender at the bank other owner-builders have worked with. Don't get caught up in the current market value of your land...it is irrelevant. The bank will (most likely) not lend more than 80% of the appraised value of the final product. How much will an appraiser say the house on the 5 acres will sell for when completed? My bank will let owner sweat equity count towards the 20% down...it doesn't have to be actual cash. My lender will also allow us to start the house and come see them when we are out of funds, but this is not typical. Very few banks will do owner-build construction loans. Each have their own rules. Go talk to your lender. But the bottom line is your land value doesn't matter. What matters is what your property will sell for once completed. For all we know, your bank may only lend 60% of the appraised value on owner-builds. Make an appointment and get their rules....See Morehsk14
4 years agoB Carey
4 years agohsk14
4 years agowacokid
4 years agolast modified: 4 years agoJeffrey R. Grenz, General Contractor
4 years agohsk14 thanked Jeffrey R. Grenz, General ContractorGerry
4 years agoTBL from CT
4 years ago
Related Stories
BUDGETING YOUR PROJECTConstruction Contracts: What to Know About Estimates vs. Bids
Understanding how contractors bill for services can help you keep costs down and your project on track
Full StoryREMODELING GUIDESConstruction Timelines: What to Know Before You Build
Learn the details of building schedules to lessen frustration, help your project go smoothly and prevent delays
Full StoryKITCHEN CABINETSCabinets 101: How to Choose Construction, Materials and Style
Do you want custom, semicustom or stock cabinets? Frameless or framed construction? We review the options
Full StoryCONTRACTOR TIPSLearn the Lingo of Construction Project Costs
Estimates, bids, ballparks. Know the options and how they’re calculated to get the most accurate project price possible
Full StoryENTRYWAYSHelp! What Color Should I Paint My Front Door?
We come to the rescue of three Houzzers, offering color palette options for the front door, trim and siding
Full StoryLIFEHow to Decide on a New Town
These considerations will help you evaluate a region and a neighborhood, so you can make the right move
Full StorySMALL SPACESDownsizing Help: Where to Put Your Overnight Guests
Lack of space needn’t mean lack of visitors, thanks to sleep sofas, trundle beds and imaginative sleeping options
Full StoryBUDGETING YOUR PROJECTDesign Workshop: Is a Phased Construction Project Right for You?
Breaking up your remodel or custom home project has benefits and disadvantages. See if it’s right for you
Full StoryFURNITUREKnow Your Sofa Options: Arms, Cushions, Backs and Bases
Get your sock arm straight from your track arm — along with everything else — to choose the sofa that’s right for you
Full StoryWORKING WITH PROS5 Steps to Help You Hire the Right Contractor
Don't take chances on this all-important team member. Find the best general contractor for your remodel or new build by heeding this advice
Full Story
cpartist