Wednesday, August 22, 2012
Non Conforming New Construction Loans
After a long conversation with Real Estate and Lending executive in the Banking industry, I learned that the banks have loosened their regulations a little for non-conforming new construction loans. When you build a Log Home, unless you are a cash buyer, you have to obtain a non-conforming new construction loan. The reason is because every Log Home Company requires payment in full for the Log Home "KIT" upon delivery. This means that there is an extra draw scheduled into the loan.
A standard new construction loan consists of 6 draws. A non-conforming new construction loan consists of anywhere from 7-9 draws. A draw is a release of the money to pay for materials and labor. The requirements still are 20% down. This can be in the form of cash or equity or a combination of both. You also must have a credit score of 725 or higher. So, if you have been thinking about building your DREAM CEDAR LOG HOME, now is the time. Interest rates are at an all time low, and financing just became a little bit easier. Contact Kim Schneider with NORTH AMERICAN WHOLESALE CEDAR LOG HOMES for more information. 412-629-0069. Local models available to view by appointment.
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Cedar is loaded with natural oils that that insects simply avoid. No more worrying about carpenter bees, beetles and ants because they simply don't like cedar. With a serviceable life of 50 years or more in ground-contact conditions, early wood utility poles, railroad ties and fence posts demanded the performance of cedar.
ReplyDeleteWith a new home construction loan, there will be no home to use as collateral because the home is still to be built. In that case, the bank will have your word as guarantee for payment of the loan. Am i right?
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