Mortgage Banker Magazine included a great write-up about us!
6 Questions and Answers About Construction Loans
Although there are lots of beautiful homes to choose from - and in many price ranges - you may be finding the ones in your desired locationaren't quite what you had in mind?
If this sounds like you, a construction loan can provide you with the funds you need to make the house of your dreams into reality.
There are many elements to a construction loan to consider before you put pen to paper, shovel to dirt and hammer to nail.
Here is a little bit more about construction loans that can help you dig into the details.
1. What is a construction loan all about?
Perhaps the best way to describe how a construction loan works is how the average home is built: It's put together pieces at a time, starting with the foundation, then the framing, clapboards and so on.
Unlike a purchase loan, in which the seller receives a lump sum from the lender, with a construction loan, the developer receives the funds to pay for the parts and labor over time in installments or "draws." Paying out the funds in stages - rather than all at once - provides greater clarity and assurance that production and progress is taking place on an ongoing basis.
In addition to the proceeds of a construction loan paying for the cost of building and development, the funds also go toward the purchase of the land, assuming that the land isn't already owned by the borrower.
In terms of when or how these funds get distributed, much of this depends on the lender's arrangements with the builder and homeowner. Generally speaking, though, it is contingent upon progress and hitting benchmarks. In other words, if the builder requests more funds, the lender will send someone out to assure that work is complete. If things are going as planned, the added funds are released.
2. How much can you borrow with a construction loan?
From a total acquisition perspective - meaning the cost of land in combination with the expenses associated with development - some lenders can provide loans for up to 95% of the purchase price.
However, just because a lender can lend as much as 95% doesn't mean it actually will. The actual amount is largely contingent on the borrower's creditworthiness as well as the project's market value upon completion. A larger down payment may be required, equivalent to 20% or 25% of the price, for instance.
3. What type of construction loans are there?
Construction loans come in many different types or offerings. The one that most people think of are called construction-to-permanent. Much like its name suggests, a construction-to-permanent loan provides the funds necessary to build the home as well as the permanent mortgage financing once the home is complete. Occupancy for a construction-to-permanent loan is primarily for owner occupied residences. Construction loans are taken out assuming that the home will be the primary residence of the borrower. In some instances a vacation home or investment property requires additional considerations.
Other construction loan options include construction-only, FHA 203k, owner-builder and renovation loans. While a construction-to-permanent loan is for projects that are large in scale and scope - starting at the ground floor - a renovation loan is designed for projects that are much smaller in terms of work as well as actual financing. So if you're looking to refurbish your bathroom or kitchen, replace carpeted flooring with hardwood or add a second floor, a renovation would likely be a better option than a construction loan.
4. Can you take out a construction loan if you're the one doing the building?
In a do-it-yourself era, evidenced by DIY Network and HGTV - many people are looking to save money by doing the labor themselves. However, construction loans aren't for DIY enthusiasts.
Home construction projects are a huge undertaking and lenders must be certain that developers have the appropriate qualifications, certifications and licensure that corroborates their ability to complete the project on budget and on time. Thus, you'll need to find a builder to construct the house on your behalf. There may be some exceptions that apply. If you're in the industry as a general contractor, have the means and technical capability, you may be able to helm the project.
5. How does interest work on construction loans?
There isn't much of a difference between construction loans and regular purchase loans from an interest perspective. The interest that you pay is predicated on your credit history and what the market is for interest rates, which is influenced by the Federal Reserve. Rates can be fixed - where the interest remains the same for the life of the loan - or adjustable, which vary over time. Variable rates typically start out very low, which is why they remain highly popular.
As far as when you will start paying monthly mortgage payments with the attached interest, it all depends on when the project actually begins. Usually, it's while building is ongoing, rather than once the house is fully completed. At RMS the Borrower typically pays Interest-Only payments during the build phase, then switches to a fixed-rate, principal and interest, amortizing loan in the permanent phase.
6. What's the biggest distinction between a traditional loan and a construction loan?
As previously mentioned, a distinguishing characteristic of construction loans is how they're paid out, in phases rather than as a lump sum. They're also unique in that they’re on the shorter side when it comes to payment period. Typically, purchase loans run for around 30-years, which is the amount of time you have to pay them off. Construction loans aren't nearly as long. This is definitely something you'll want to keep in mind prior to applying, as once the project is completed, the balance of the cost will be due.
If the houses up for sale in your area simply won't do, a construction loan can make your homeownership dreams come true. Contact RMS to learn more.
FOR IMMEDIATE RELEASE:
Residential Mortgage Services welcomes The Duncan Team to RMS Charlotte, NC
February 26, 2020 - Residential Mortgage Services Inc. (RMS), a leading independent, purchase-focused mortgage lender, serving primarily the Northeast, Mid-Atlantic and Eastern Seaboard markets, is pleased to announce that Stacey Duncan, Christopher Day, Anthony Villeneuve, Darius Bryant, John Dillon III, Daniel McNaught, Weston Keith and Felicia Minggia have joined RMS as The Duncan Team in Charlotte, NC.
The Duncan Team will be bringing over 17 years of mortgage experience with them. What sets them apart from other lenders is their dedication to making sure their clients’ mortgages fit in with their long-term personal and financial goals. The Duncan Team has created a process where technology meets personalization; giving attention and efficiency to each of their clients with the highest level of service. As they build out their borrowers’ action plans for homeownership, they work to eliminate undue stress and paperwork along the way.
Leading The Duncan Team is Sales Manager, Stacey Duncan. Since 2002, Duncan has worked tirelessly in the local marketing to help borrowers realize their dream of homeownership. According to Duncan “I am passionate in assisting people of all backgrounds with becoming homeowners. Purchasing a home is an exciting journey and I am honored when our borrowers make us a part of that process.”
“We are committed to building a team of the best loan officers in the markets we serve,” said James Seely, President and Chief Executive Officer of RMS. “We are confident The Duncan Team is going to do a great job serving the needs of our clients and prospective clients throughout the Carolinas.”
Dylan Veal, Area Manager said, “The Duncan Team is highly visible in the Carolina markets and will continue serving the needs of clients & prospective clients with real estate purchases or refinances. We are proud to add them to our growing team of professional, highly experienced loan officers.”
Residential Mortgage Services Inc., headquartered in South Portland, Maine, was founded in 1991. RMS has over 750 employees and is a licensed lender in 23 states and the District of Columbia. RMS offers a wide range of mortgage products including conventional purchase and refinance home loans, as well as VA, FHA, USDA-RD and many state-sponsored loan programs. For more information on RMS visit the company’s website at www.RMSmortgage.com.
The Duncan Team
13024 Ballantyne Corporate Place, Suite 625
Charlotte, NC 28277
6 curb appeal-enhancing plants to start growing now
Waiting is part of life. But when the cold weather rolls in, the need to "sit tight" happens with greater frequency. Waiting for Christmas and Hanukkah. Waiting to see results from your New Year's resolution to exercise more. Waiting for the first flakes to fall - then anxiously awaiting the return of warm temperatures from spring when piles of snow have you at your wit's end.
If you're a homeowner, all this waiting around gives you plenty of time to prepare for spring, which is when the housing market really starts to heat up. During this intervening period, you may want to consider exercising your green thumb, the fruits of which can help to truly beautify your home and enhance curb appeal, which is a key aspect to drawing attention for would-be buyers. According to Zillow, the average seller has approximately 13 years of age on their home. In addition to some strategic renovations, shrubs, flowers and gardens help to spruce your property up a bit so that it captures potential buyers' attention.
The ground may be far too hard and temperatures far too cold to dig into the dirt outside for now, but there are a plethora of beautiful, aromatic plants you can begin growing from inside your home, then transfer outdoors once the ground thaws and April showers give way to May flowers.
Here are a few primarily outdoor garden plants that grow great from indoors, as recommended by The Spruce. You may not need to wait too long before you see some serious sprouting:
Otherwise known as flowering maple, abutilon is an annual flower, meaning that its life cycle lasts about a year - as opposed to a biennial or perennial - and thrives in tropical environments. As such, in order to enhance growth, it's ideally positioned in areas of the home where the sun shines the brightest. A window that faces southerly or westerly. It's fairly simple to manage as well, as a result of its desire for warmth, so you won't have to water it too frequently. The Spruce suggests doing so once the soil looks and feels completely dry. You may also want to use a water-soluble fertilizer.
Depending on when you begin, you can expect to see blooming in late April or the middle of May. The petals of abutilon are a vivid burnt orange, almost certain to capture the eye of house hunters.
If you enjoy the kaleidoscope of colors from fall foliage, the begonia is right up your alley. The teardrop-shaped leaves are typically fuschia (purplish red) and often have additional deeper colors that add texture and contrast. But that's for rex begonias. There are dozens of begonia varieties, including ambassador series, cocktail series, doublet white, wax, sutherland and the appropriately described painted leaf. The type you get will largely dictate the colors you can expect, including silver, pink, red, green and brown.
Although begonias do thrive in humid environments, avoid placing them in portions of your home with direct sunlight. Partial or indirect is preferable. Also, be careful not to over water, as begonias harness moisture well.
Found in many parts of the world, including southern and western Europe as well as eastern Asia, boxwood is an evergreen variety that tends to grow rather slowly. Patience pays off, however, because the plant can grow to be as tall as nearly 50 feet. It takes a while for them to grow that that, as the growth rate is typically no more than around 12 inches per year, according to horticulturalists.
For boxwood to get going with growing, however, humidity is key. Place the initial seedlings of this evergreen in portions of the home where the air is a bit thicker. You can add to the humidity of your home through various moisture-promoting strategies, such as letting dishes from dinner air dry, leaving the door open slightly while showering or making your own tea more frequently (humidity derives from the teapot's steam).
Bright sunlight and watering every day or two helps as well. Much like the abutilon, water only when the soil feels dry.
If you're sick and tired of the cold and wet, caladium feels your pain. They're native to tropical environments and have distinctively shaped leaves that resemble an arrow. The colors combine green and red, similar in distribution to what you'd find on stalks of rhubarb. Yet unlike the sour vegetable, caladium are poisonous if ingested, so be sure to keep them out of reach of pets or young children.
As far as care goes, again, they loath the cold, so keep them in warm environments that are ideally between 60 and 85 degrees Fahrenheit, The Spruce advised. Light sources should be indirect and water enough to keep the soil consistently moist, but not drenching wet.
This plant is another one whose leaves are uniquely shaped (almost resembling a heart), and are multicolored, flanked by green with yellow accents and a purplish pink in the center. Other common coleus colors include green and red. Similar to the other flowers and plants mentioned, this plant prefers temperatures on the warmer side, but do still grow even when temps dip below room temperature. However, ensure that the thermostat stays above 55 degrees Fahrenheit.
The Spruce says indirect bright sunlight is this plant's preference and the soil should remain damp to the touch, which entails regular watering.
You don't have to have a green thumb to have heard of the geranium, which is one of the more fragrant flowers you'll find and traces back more than 200 years. What makes these primarily pink and white beauties particularly great indoor plants is their need to overwinter, which basically means that they require sheltering from the cold. This can be done by placing geraniums in a cool - but not cold - portion of your home, such as in the cellar or garage. They do still require sunlight to grow, but it doesn't need to be direct. The Spruce says full sun is best.
Lastly, avoid over watering by allowing the soil to dry completely before the next one.
Through tender loving care and attention, these plants can add eye-catching curb appeal and valuation to your home that is well worth the wait!
Heart Healthy Exercises to Do At Home
February isn’t just about chocolates, flowers and Valentine’s Day cards, it is also American Heart Month. Heart Month has been celebrated annually since 1963 in an effort to make Americans more aware of heart disease and ways that they can help prevent it. The American Heart Association recommends at least 150 minutes (30 minutes for 5 days) of moderate to vigorous exercise a week in order to improve cardiovascular health. Busy schedules can make finding the time to exercise a challenge. Luckily there are plenty of activities that you can do in and around your home to help get your 150 minutes of exercise in for the week.
In the winter shoveling snow from your walkway or driveway is an excellent way to get moving. You could even consider buying a roof rake to remove snow build up and avoid ice dams that cause leaks in your home. In the warmer months raking leaves, mowing the lawn, weeding, mulching, picking up fallen sticks and trimming hedges are all great ways to add curb appeal to your home. They also get your blood pumping and improve your overall health. Instead of paying someone else to take care of your outdoor chores, start spending some time on the weekends getting fresh air and making your outdoor space the envy of the neighborhood.
Spending the day doing housework can also elevate your heart rate. Clear things out from your attic or basement that you no longer need and break a sweat carrying items up and down the stars. Sweep, vacuum and mop your house, or even rent a carpet steamer and give your floors the deep cleaning they deserve. Roll up your sleeves and get your blood pumping while you get a head start on Spring Cleaning.
Walking is the simplest form of exercise, but its benefits for your overall health are huge. According the American Heart Association, for every hour of brisk walking, life expectancy for some people may increase by two hours. Walking at a brisk pace for 150 minutes a week can reduce your risk of heart disease and improve your blood pressure, blood sugar and cholesterol.
Common Household Items to Get You Moving:
Canned goods: Use cans in place of hand weights.
Wall: Wall-sits will work your quads and glutes.
Stairs: Walk or run the stairs in your house for a great cardio work-out.
Countertop: Do pushups using your counter top while you wait for your dinner to cook.
150 minutes can seem like a lot of time to spend exercising in a week, but it is very manageable when you can do it at home. Get up, get moving, and start improving your heart health!