Construction Loan

Asked by Himanshu, 97229 Tue May 4, 2010

I own a piece of land in portland. I'm planning to build a home and looking for a Construction Loan. Can someone provide information about lenders and what should I look for?

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8
Dp2, , Virginia
Wed May 5, 2010
This is interesting. Many lenders--especially the large, national ones--have been shying away from A&D and construction loans (at least in some of the areas where I invest). What kind of LTVs are these lenders doing? How much skin do they want to see? When do they want to be taken out?
0 votes
Kathy Weaver, , Oregon
Wed May 5, 2010
Golf Savings Bank Kathy Weaver 503-504-8611 cell 503-212-2271 We have One Time Close Construction Loan. Look forward to hearing from you.
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Kerry O'Neal, Agent, Bend, OR
Wed May 5, 2010
My suggestion would be to go to smaller, regional banks, and talk to some that lend their own money (like WaFed) and Summit Mortgage. Construction financing is some of the toughest to find right now (especially in Central Oregon where I am), but we've had some luck with the above ideas.
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Brad Fix, Agent, Yacolt, WA
Wed May 5, 2010
Hi


Himanshu
A couple of important things about construction loans make sure that the loan you get rolls over to permanent financing or you could be paying loan costs twice. Make sure that you have to sign for all drafts for the loan and make sure you keep track of where the money is going and that the amount spent matchs the progress of the home. I would hold back 10% you need to make sure that the contract you sign with builder has some teeth for not meeting deadlines, the last thing you want is for contracter to have most of the money and still has a lot of work to do . Do your home work and ask questions visit my web site for a good lender good luck
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Christina Al…, , Portland, OR
Tue May 4, 2010
Himanshu,
How far are you in the process? Have you met with contractors and obtain bids? Do you know your total cost to build? Do you own your lot free and clear?

I am more than happy to help with along with this process. I have worked with a lot of builders as well as borrowers who are building thier new primary or investment properties. Feel free to contact me to start the process, I have included my information below.

Christina Alwert
Advantage Mortgage Group

Apply Online at http://www.christinaalwert.com

360-921-7416 cell
503-266-5800 office
503-266-5801 fax
0 votes
William Metz…, , Portland, OR
Tue May 4, 2010
First, try local community banks, such as Umpqua. If they have nothing, go to Washington Federal. They always do these kinds of loans, have for years and didn't get caught up in a lot of the bank mess in the news.

You will be looking at two loans, a construction loan and then a takeout loan. For the construction loan, you will have to subordinate your property and perhaps even contribute some cash to the loan. Maybe not. It will depend on the loan-to-value ratios. It will cost you at least 2 points over prime and maybe more on the amounts advanced. That is, you won't be taking down the whole loan at once--only what the contractor needs on each draw.

The bank should explain such issues as early issue title, where the lender (and you) can be covered around contractor liens. The bank should also handle the contractor draws (I'm assuming you're not a contractor, by the way).

You will need a takeout loan committment before the construction lender will fund your construction loan. A takeout committment is nothing more than a traditional mortgage loan. Like any mortgage loan, it will have its own underwriting costs--points, appraisals, etc.. it will seem unreasonable to you to have to pay for it, because you will have just done so for the construction lender. That's just the way it goes.

Contact me if I can help.
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Janeese Jack…, Agent, Portland, OR
Tue May 4, 2010
H: would definitely recommend comparing but I've had clients who have had good luck with Washington Mutual in the past for reasonable construction loans...
Good luck,
Janeese Jackson, Principal Broker
Real Estate Resource
503-709-0802
jj@janeesejackson.com
0 votes
Lana Lavenba…, Agent, Grants Pass, OR
Tue May 4, 2010
No matter who you go to you want to make sure you are using the same information to compare them all. Interest rates, buy downs, points to pay for the loan, appraisal fees and on it goes. Make sure that what ever bank or mortgage lender you use will give you the same type of information. That way you will be able to tell who will give you the best deal for your dollars. You will also need to find out - how they pay the contractor. That will be important also. Good luck!
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