Jerry Thomas's (constructionloan) Blog

So you checked your credit scores online and you're good to go. You apply for your mortgage and are told that the scores your lender got are significantly different from the ones you got. How could that be?What you may not know is that there are many credit scoring "models". Think about this, you...

There's no way around it, construction loan rates are a little higher than purchase loan rates. Construction loans are more work and more risk for the lender. Not to mention that the end loan rate has to be locked all the way to completion of the project. That can take 6 to 9 months or longer. Co...

A modular builder I know made a posting on Facebook about being asked "What's your cost per square foot?". There are just so many variables in this question, the answer is pretty useless. Does it include land costs? Site development? How large is the kitchen? I have a similar pet peeve, the cost ...

Many of the clients I work with have been gifted their land or purchased it some time ago. But others are looking for the site for their new home. Here are some thoughts and steps you should take before putting an offer in on a lot. *Visit the local Building Department- Every city/township has a ...

Land equity comes in three forms;*First, gifted land- A family member has offed to gift you land, or they sold it to you at a greatly reduced price, and you have accepted their generous offer. Congratulations, you now have equity in your project! How much equity will depend on the appraised value...

Many of my referrals come from factory built home dealer/builders. Modular and Manufactured homes are great for the FHA/VA construction loan program. They save on construction costs and time (allowing you to save on interest during construction). They are built with quality materials, in a contro...

I frequently get calls from home buyers that want a construction loan to purchase and fix up an existing home. These loan are what we would call Rehab or Rehabilitation loans, not construction loans. The most well know rehab loan is the FHA 203k loan but Fannie, Freddie and even VA have their own...

I had a call from my website yesterday from a frustrated home buyer. He wanted to buy a home with an FHA loan. Not surprisingly he's had a rough go of it. Several offers made, always losing out to a cash or conventional loan offer. He now wants to build but wasn't sure of what steps to take in wh...

I frequently have potential borrowers state that they want to participate in the construction of their new home to save money. Unfortunately this is another layer of risk for construction lenders in an already risky loan. No lender I know of will allow the borrower to do this on a low down paymen...

With the FHA Construction loan your contractor will only be paid as work is completed. This process is called is called a "draw".    It starts with your contractor contacting the lender to let them know that work has been completed. The lender will then send out an inspector to confirm that the ...