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Serving
the Southwest Florida areas of Naples, Marco, Sanibel and
Captiva Islands, Bonita Springs, and All Of Florida On The Internet
for 4 years.
1-888-964-LOAN (5626),
or : 1-941-949-0000 |
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"Thanks to all of my satisfied
customers for 3 years of success on the 'Net." |
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"For those of you considering
an Internet mortgage lender, you will enjoy working with me.
:-) " |
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Our Licensed
Mortgage Brokerage Business provides home mortgage loans and
the best interest rates in Florida and Colorado.
On the 'net since September '95, we offer conventional &
Jumbo loans, construction, refinance, no-income verification,
home-equity lines of credit and foreign
buyer loans. |
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Copyright
1999, The May Mortgage Company, a Licensed Mortgage Brokerage
business,
3960 Via Del Rey, Bonita Springs, Fl., 34134..... 1-888-964-LOAN(5626),
1-941-949-0000 |
If you're
here, it may be that you are researching whether to build or
to buy a home. Below, you will find answers to the questions
that I have found are of greatest interest to clients -
Pros and
Cons of building
or buying;
The differences between construction
& construction-to-permanent loans;
The Construction
Administration Process between
the Lender and the Builder;
During construction, when
do you begin making
mortgage payments, and how much.
Enjoy
the reading below, and please call me
when you have specific questions. |
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CONSTRUCTION
- PROS
- With
a newly-constructed home, you get what you want.
- Depending where you build, the
cost of the construction home may be less expensive than an existing
home.
- The basic model home may be modified
to suit your particular needs, essentially making it a custom
home.
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CONSTRUCTION
- CONS
- Possible
defects in construction
- can be solved with a Home Warranty.
- Immature
Landscaping
- New landscape requires more attention than an existing home.
- Builder
Qualifications
- Check out your builder carefully.
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EXISTING
HOME - PROS
- Depending
on where you want to buy, an existing home may be less expensive.
- After
the first 2 years of life, a custom construction homes construction
problems may have been resolved by the builder. HINT: Maybe it's
better to buy a recently-built (i.e., 2+ year old) home!
- The
landscaping is fully matured.
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EXISTING HOME - CONS
- Depending
on where you want to buy, an existing home may be more expensive
than a construction home.
- The
home may not be exactly what you want.
- The
home may not be in the area where you would like to live.
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THE PROCESSING DIFFERENCES BETWEEN
EXISTING-HOME LOANS AND CONSTRUCTION LOANS
The
processing of an existing-home loan is much simpler and quicker
than a construction loan. The basic process of reviewing and
documenting income/debt/saving/credit apply. The loan generally
takes 30 days or less to close, with the buyer taking possession
of the home after Closing.
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CONSTRUCTION
LOANS - PROCESSING
The
processing of a construction loan is a little more involved compared
to an existing-home loan. The primary differences lie in the
qualification of the builder, and an in-depth appraisal. The
appraiser must use plans, specifications and a cost breakdown
sheet from the builder to determine the value of the home. The
land value is factored into the home cost-to-build calculation
to derive the Total Value.
Once a construction loan is approved - and the builder has exhausted
the Earnest Money (downpayment) Funds, the lender begins a CONSTRUCTION
LOAN DISBURSEMENT PROCESS
- called draws
- that are used to provide
money to the builder during the
phases of construction.
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CONSTRUCTION
ADMINISTRATION PROCESS
The
builder and the lender agree on the disbursement of funds, specifically
the number of "draws", and the amount of money within
each draw. The amount of money within each draw is different.
The 1st draw amount is approximately the same as the last
(5th, or if a pool, 6th) draw. The 2nd, 3rd and 4th draws are
the
highest draw amounts.
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QUALITY
CONTROL OF THE CONSTRUCTION PROCESS
Between
each draw, the lender -
- Requires
an inspection of that particular phase of construction to ensure
that the builder has completed the construction according to
specification (spec);
- Requires
from each craftman associated with the construction, a notarized
document called a Mechanic's Lien Release, which certifies that
the craftsman has received Payment for Services Rendered;
- Requires
that the majority of the Builder's Profit be held within the
Final Draw, ensuring that the work is completed.
- After
the final phase of construction, the property is given a Final
Inspection by the original Appraiser to ensure that what was
shown on the plans and specs was built according to the plans.
- When
the Appraiser gives a Final Approval of Construction Completion,
a Certificate of Occupancy (CO) is issued by the City where the
home has been built. At this time, the home is ready to be occupied.
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MONTHLY
CONSTRUCTION PAYMENTS
Once
the draw of the lender's money begins, the buyer begins to pay
INTEREST-ONLY payments to the lender. The payments are on the
outstanding amount of the TOTAL DRAW FUNDS that the builder requests.
As such, as the TOTAL DRAW FUNDS increase, so will the buyer's
interest-only payments. REGULAR PITI payments begin once the
buyer takes possession of the home.
APPROXIMATING
YOUR MONTHLY CONSTRUCTION PAYMENT
Take
the amount of the builder draw, multiply that value by the interest
rate. That value will give you the YEARLY dollar value of interest
for that particular draw amount. Next, divide that value by 12,
and you will get an approximate payment for that month, for
that amount of the draw. Remember to add the draws together
and then recalculate that
monthly draw payment.
BACK
TO LOANS-4-HOMES HOME PAGE
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Copyright
1995,1996,1997,1998 Michael May of LOANS-4-HOMES.COM
Last
Modified: Saturday, May 1st, 1999 ..... 1535H
Michael
May,
WebMaster
This site is under constant renovation/improvement/construction
THE
MAY MORTGAGE COMPANY
3960 VIA DEL REY, BONITA SPRINGS, FL.,34134
TOLL-FREE:
1-888-964-LOAN(5626)
LOCAL: 1-941-949-0000 FAX: 1-941-949-0001 |
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