* Land acquisition * Builder limited scope agreement (non-refundable deposit) * Construction loan (expect to make 20-25% down payment - money paid toward land acquisition and non-refundable preconstruction/builder services can be applied as equity) * Draw request (similar to a line of credit; lender pays builder directly in stages as build progresses) * Conversion to mortgage when construction is complete
Great video. Going through this process now. Maybe you should put a lower end range on the builder SOW process? I just paid $3K to my builder for this process in Indiana, so it appears to vary massively by state. I can’t imagine paying $50K for this part of the process. And yes, this builder builds million dollar homes too.
Correction VA construction loan lenders are challenging to come by. True, $0 down VA construction loans aren't incredibly common in today's lending climate. Many lenders, including Veterans United, do not currently offer this kind of financing.
I have the land. Would need a construction loan to start the process. What if I want to pay off the house with cash when house is complete? In our case it would be money from our present house we sell and cash from stocks. Will banks do this?
How does the bank determine land value in their calculation for their overall appraisal? For example we purchased some land pre-covid and fast forward two + years later, the value of the land (based on tax assessed value) is more than double of purchase.
Designing plans as we speak for a custom home build in Illinois. Been watching a lot of your videos. Thanks for taking the time to share your knowledge!
5:18 don’t forget that cash reserves are necessary. Some banks require significant cash reserves before issuing a loan. I.e., a down payment is not enough
* Land acquisition
* Builder limited scope agreement (non-refundable deposit)
* Construction loan (expect to make 20-25% down payment - money paid toward land acquisition and non-refundable preconstruction/builder services can be applied as equity)
* Draw request (similar to a line of credit; lender pays builder directly in stages as build progresses)
* Conversion to mortgage when construction is complete
Great video. Going through this process now. Maybe you should put a lower end range on the builder SOW process? I just paid $3K to my builder for this process in Indiana, so it appears to vary massively by state. I can’t imagine paying $50K for this part of the process. And yes, this builder builds million dollar homes too.
Correction VA construction loan lenders are challenging to come by. True, $0 down VA construction loans aren't incredibly common in today's lending climate. Many lenders, including Veterans United, do not currently offer this kind of financing.
I have the land. Would need a construction loan to start the process. What if I want to pay off the house with cash when house is complete? In our case it would be money from our present house we sell and cash from stocks. Will banks do this?
How does the bank determine land value in their calculation for their overall appraisal? For example we purchased some land pre-covid and fast forward two + years later, the value of the land (based on tax assessed value) is more than double of purchase.
Thanks you for info
Designing plans as we speak for a custom home build in Illinois. Been watching a lot of your videos. Thanks for taking the time to share your knowledge!
Happy to provide any info we can.....it can be a stressful time but well worth it. Congrats on your upcoming build!!
It was hard to find this info elsewhere. Thank you!
Glad you found it helpful :)
I really enjoy your informative channel.
I appreciate that! Thanks for watching :)
5:18 don’t forget that cash reserves are necessary. Some banks require significant cash reserves before issuing a loan. I.e., a down payment is not enough
You’re videos are so informative. I think I’m on the right track. I love my builder. I’m not going to love cutting back my bougie taste!
Don't forget to smash "like" on these videos. Great job with a professional and well prepared presentation!
Very helpful information