Securing Financing and studying law -Spring 2008

As a late winter system in early march laid a beautiful, if short lived, blanket of snow on our lot, we were getting ready to break ground.

We secured Kyle Holloway with Synergy Development to be our builder (www.synergybuilthomes.com. We'll write more later about our process of picking a builder.)

We had been saving our money for the down payment and we spent March going back over every detail of the plan to make sure we had the plan exactly as we wanted it so that we could break ground as soon as financing was complete. Our goal was May 1st.

We went into the finance progress quite confident. We had worked to insure our credit was strong, we had cash in the bank, as well as equity in the lot, we had paystubs, asset documentation and bank statements gathered, and we had previous reassurances from our lender that there would be no issues.

During the Process of getting loan approval we had to submit the final plot plan that, among other things, shows the house fits on the approved building area of the lot. It was at this point that we learned first hand...

HOUSE CONSTRUCTION LESSON 1: Expect Hic-ups in the process.

Our house did not fit. The last changes we had made to fit inside the lines of the house were not accurate. As luck would have it, the change would not be easy. We evaluated every option, from major modifications of the plan to starting over from scratch, finally we decided to ask the city for a variance, or an exception to the rule. This decision would postpone construction for at least another 3 weeks as we went through the process of approval and it was very possible that we would be turned down, and be back at square one. Fortunately we were able to convince the city that our lot provided unique circumstances and we were granted the variance on May 22....3 weeks behind schedule.

With our variance approval in hand we turned in the last of the documents to our bank only to learn....

HOUSE CONSTRUCTION LESSON 2: Shop for your construction loan, no matter how much you like your bank.

What we did not take into account is how much the lending market had changed in just one year. Because we had a good relationship with our bank, we chose not to shop for the construction loan. We won't bore you with the details, but after much delay and missing our goal for breaking ground, our bank offered us a construction loan that we found undesirable.

So we hurriedly contacted other institutions to secure a loan that we could live with. Joan Pruitt at Telcoe Federal Credit Union was very helpful in the process and has been very easy to work with (www.Telcoe.com) We finally closed on our construction loan on July 2nd.