Compaire Mortgage Loan Rates, Bad Credit Loans

Land foreclosures have spiked in recent months across the United States of America due to circumstances beyond the control of most property owners; these include the downward trend of the United States economy, the erratic behavior of the stock market, higher interest rates that banks have placed on loans and mortgages, and a sudden upturn in unemployment numbers. All of these circumstances have combined to create a perfect storm of foreclosure proceedings that have left many into tough financial waters.

Since 2007 bank foreclosures have risen by one hundred and eleven percent. Almost half a million individual foreclosure and pre-foreclosure proceedings have been initiated by banks or other lending institutions and the numbers continue to grow and escalate. The number one reason that these numbers have seen a dramatic increase has been the sudden decline of the United States’ economy. After enjoying record increases over the last six or seven years that saw the stock market climb to record heights the market suddenly and unexpectedly collapsed. This collapse caused hundreds of thousands of individual investors to lose their life savings. This meant that they could no longer afford to pay their accumulated debt thereby forcing banks and other lending institutions to begin their spiraling rise in land foreclosures.

Since the sudden downturn in the United States’ economy, the stock market has not only ceased its predictable upward trend, but has become volatile – making dramatic moves upward and downward almost without prediction. This climate makes it hard for investors to predict what stocks will increase or decrease in value which therefore makes it hard for investors to know what to invest in and what not to invest in. This means that it is harder for investors to make money. When investors have hard times making money off of the stock market, they have a hard time paying their bills which leads more foreclosures.

Since banks have had to call in a lot of bad loans, they have found that many debtors or mortgage holders have been unwilling or unable to repay the extended loans. This has led to a cash crunch in which the banks have found themselves short of the daily funds needed to complete financial transactions. Banks are therefore less likely to lend money. This has led to an increase in interest rates related to mortgages or other types of loans. These higher interest rates have forced hundreds of thousands of property owners into financial straits and led to an increase in the total number of foreclosed properties.

Finally, a downturn in the United States economy not only means that investors are less likely to make money and that banks are less likely to loan money, but that the average person has a greater risk of becoming unemployed. Unemployment is the number one reason people site as a reason for being unable to repay loans or mortgages. The unemployment percentage in this country has spiked to over seven percent in recent months. This is the highest figure in fifty years. This means that these unemployed people will now be unable to repay any accumulated debt they may have incurred when times were good; thus, leading to more land foreclosures.

For all of these reasons, foreclosures have risen dramatically and are likely to continue their increase as long as the economy continues to sputter. 

Home buyers who want to build a property for themselves or for investment purposes, can find it a challenge to compare flexible loans that will offer them the best deal as there are many variables. A loan for building a home is called a ’self build mortgage,’ and there are several different types of self build mortgages available in the market place.

Differences between a Self Build Mortgage and a Traditional Mortgage

To compare flexible loans for a self build, the differences between a self build mortgage and a traditional mortgage first needs to be understood. The main difference is that self build mortgage money is released in stages as the building progresses, rather than as a single amount. The success of the loan application is not entirely dependent on financial circumstances, as with a traditional mortgage, but also on the quality and credibility of the presentation. Mortgage lenders will want to ensure the project is properly planned and produced by suitably qualified professionals. They will use the plans to assess the value of your plot of land and the end-value of your self build scheme. A thorough cost analysis needs to be made along with an itemized budget. They will also take into account your enthusiasm, experience, confidence in completing the building within the timescale laid out, and the reasons why you want to do a self build.

Currently there aren’t any self build loans for 100% of the entire project cost. They range from 50 -80% of the land value, and therefore you require some capital to begin with. There are 2 methods by which the money can be released during the build: at the end of each stage, known as arrears stage payment, or at the start of each stage, known as advance stage payments. The advance stage payment mortgage is more popular as it gives a positive cash flow during the building process.

Before you compare flexible loans, have a carefully drafted expense plan so you know exactly how much you need to borrow, and aim to acquire a flexible loan with the lowest percentage of interest, with payments over the shortest practical period.

Important Factors to Consider When you Compare Flexible Loans

There isn’t an easy way to compare flexible loans for a self build mortgage because there are so many factors to consider, and what may be suitable for one homebuyer may not be suitable for another homebuyer. However, the important factors to consider when you compare flexible loans for your self build mortgage are:

What is the maximum loan-to-value (LTV) available?

Who will assess the valuation of the land and property? How much will it cost?

Are the staged payments made in advance or in arrears of each stage?

Will you need planning permission in a detailed or a summarized format as a condition of an advance loan?

Are there charges for multiple inspections and valuation surveys before funds are released?

Is the lender flexible if you have to alter the design of your self-build home?

Do you need a warranty or another type of structural insurance? Most lenders also require site insurance to protect against damage caused to the building during construction and theft of materials.

Are there any early termination/completion/redemption fees?

Can you manage you own construction or does the lender stipulate you must have an architect or a project manager for the build?

What construction conditions are attached to the loan?

Conclusion

There are many variables with a self build mortgage and as there is no quick way to compare flexible loans for your needs, an independent mortgage broker can guide you to the right flexible loan for your needs.

Are you considering building a new home? If so, you’ll need to find the right piece of land. But, you probably don’t buy land every day.

Whether you’re hiring a builder, or being an owner builder, finding land is the first step of what may be the biggest purchase of your life. There are many things to consider including cost, location, shape, topography, and how to find it.

Cost:

First, you must decide on your price range. This should be done prior to looking at specific lots in order to avoid shopping out of your price range. By pre-qualifying with the right construction loan professional, you can determine the right price range to begin your search.

If you are doing an owner builder construction project, don’t just speak with any lender, not even any general construction lender. You’ll need someone who understands the qualification requirements of an owner builder construction loan.

Here are two useful “rules of thumb” many experts use:

Expect to spend no more than an amount equal to two-thirds of your combined annual income to purchase the land. And, try not to budget more than a quarter of your total budget on the land. Remember, all “rules of thumb” can have exceptions, but these are safe figures.

There is nothing worse than falling in love with a particular piece of land, then realizing you cannot afford it.

Location:

Owner builders, and general contractors building a custom home, have a full range of choices for the location of the home. Location is probably the most critical factor in your happiness and your home’s value. After all, where you choose to live will influence your lifestyle and raise or lower the value of your home.

You can never improve your location. Even the nicest house is worth less if it’s in an undesirable spot. And you won’t be happy in your house if you don’t like your surroundings.

You might prefer a country setting, far from other houses and commercial development. Or you may want a town or suburban location, with schools, shopping and neighbors close by.

Some people want to be close to family, friends or your place of work; others want to be as far as possible.

Still others may wish to have a location with easy access to highways or public transportation.

Shape/Topography:

Owner builders often have a house plan in mind before looking for their land. If so, you may need to search for a particular lot shape or topography. For example, if an owner builder wants a walk-out basement, they’ll need a lot that is sloped in a way to accommodate the plan.

The other issue related to the layout of the land is the cost you may incur to get the land prepared for construction. Removing excessive earth, blasting rock, or building a special foundation can explode any owner builder’s budget.

If your land requires a well and septic, you have another set of concerns. You must know if the land “percs,” or satisfies the county’s standards for soil percolation rate. This determines the type of septic system you will need. A conventional, regular septic system will cost about a third of an engineered system. This could turn a seemingly cheap lot into a very expensive one.

If you need a well, you should know how easy or difficult it will be to find water and at what depth you will need to drill. Owner builders who don’t research these things, often end up with shocking additional costs.

Do you have a good idea of what you want and what you can afford? Great. Now you’re ready to look for land.

But how do you find it? This could prove to be the most difficult step in the entire building process for many owner builders.

How to Find Land That’s for Sale:

Newspapers - Owner builders can find available building lots through Newspapers. Check out the classified ads in newspapers that cover the area you’re interested in. Look under “Lots for Sale.”

Real estate agencies - Find them listed under “Real Estate” in the Yellow Pages of your telephone book. Agents you call may have properties listed or know of others with land to sell.

Exploring - Drive around areas you like. If you spot a sign advertising a lot for sale jot down the number and call the seller for information. If a lot you’re interested in doesn’t have a sign, talk to neighbors or check land records at the town hall to find out who the owner is. Then contact the owners to see if they’d be interested in selling.

Word of mouth - Tell families, friends and co-workers what you’re looking for. They may know of available property or be able to direct you to people who do.

Be a smart owner builder. As you look at properties, be sure to pay special attention to these practical considerations:

- Can you afford it? (Remember to calculate your qualifications for either an owner builder construction loan or a loan with the added cost of hiring a builder.)

- Is the lot large enough to accommodate the house plan’s square footage? (Check local regulations regarding placement of houses on lots.)

- How do the houses already in the area measure up with regard to size, quality and condition? Owner builders often make the mistake of building a superior house in an inferior neighborhood - a poor investment.

- Are there wetlands or other features on the property that may prohibit it from being developed?

Walk the lot, get a feel for it. Think about where on the lot you’d place your house, the swing-set for the kids, and your barbecue grill. As an owner builder, these are all decisions that you’ll be making.

Now that you’ve narrowed down your choices, get more detailed information on properties you’re considering. Gather information from reliable sources and contact the appropriate people to get answers to questions about any lot you’re considering.

The number one mistake, hands down, that most people make when building their home is not allowing enough time to get through the process, especially for those people who are acting as an owner-builder and building without a general contractor.

Building a new home, and obtaining a loan to do so, is not as simple as going out and obtaining a mortgage to buy an existing home. You CANNOT do it all in 30 days. Period. Do not expect to do so. This pre-building and planning stage is often cited as the most stressful period of most people’s building experience.

If you are buying a piece of land and wrapping its purchase into your construction loan, then you must be sure you allow enough time to get to closing on your construction loan before your land purchase contract expires. Do not let the seller or the seller’s real estate agent pressure you into a 30 day contract. This can be tricky, as most sellers and agents have no idea of the construction planning process you will be going through.

They only know that the last time they bought or sold a house it took about 30 days. Therefore, you will need to negotiate more time to get to closing unless you already have finalized blueprints, budgets, and permits. Realistically, sixty to ninety days should be the minimum contract period for the land, depending on how well prepared you are.

As mentioned, this is tricky. The complicated part is that often you will not finalize your home plan until you decide on the land. Usually, this is due to the uncertainty of the foundation plan - does the land slope or is it flat. You will need to decide quickly if you do not already know this answer.

Now that you have decided on the land, you have a ton of work to do as quickly as possible. Getting your bids (properly) to complete your budget is the single most important thing you need to do in the whole construction planning process, especially for owner builders. And, it can rarely be done in just a couple weeks.

And to make matters worse, when the clock is ticking towards your contract’s closing date, you will often be pressured to skip a step or let some of the budgeting and bids slide. This is construction project suicide. Proper budgeting is vital to building a new home. Even if you are hiring a licensed general contractor to do the work for you, you will need to take the time to flush out the exact budget and sign a proper contract for all of the work to be done.

You need as much time as possible to complete your budget, understand the county building and permit requirements, perform any soil or percolation tests, and complete your loan documentation. Sixty days will seem to fly by.

If you cannot get more than 60 days on your land contract, you will need to have much of your budget already in place. This means committing to a home plan as early as possible and getting as many of the bids that are not dependent on the lot ahead of time. Then, you can focus on just the remaining items to complete the budget.

The best course of action is to get pre-approved for your loan once you have decided to build a home so that you know your maximum budget you can qualify for. This way, you can properly set a maximum price for the lot (based on what you have seen in the area) and then choose an appropriate home plan that can be built for the remaining budget or less.

You will now be able to complete much of the planning while you are shopping for land. You can even decide to only shop for land that is flat or sloped or that meets whatever other requirements you may have.

The important thing to understand is that these decisions, which may be some of the biggest of your life, must be made quickly if you have not planned correctly or if you are under the pressure of a closing date. Do everything possible to organize your project before the clock starts counting down towards the seller’s closing date.

Once you have a lot, a home plan and a budget, you will still need to complete the rest of the loan process. You will work with your loan officer and loan processor to provide the required documentation to complete the loan.

The appraisal and title work will have been ordered by the processor. You will need to schedule an appointment with the appraiser to review your plans and deliver the appraisal fee. You may also need to contact the closing agent to be sure they have all of your contact information.

While the appraiser and closing agent are doing their jobs, you will need to submit any remaining income documentation, asset statements, or other requested information. You will also need to arrange your insurance and permit applications during this time. As you can see, you will be busy. This is the trade-off for the chance to build the exact home that you want.

Once the appraisal, title work, budget, and all other required documents are in the hands of the lender, the file can be submitted to final underwriting. To be safe, expect that you will close in approximately ten days to two weeks from this point, barring unforeseen complications.

In the vicious circle of cash needs, sometimes person feels inadequate cash in his pocket to meet the personal requirements such as once in a lifetime car deal, purchase of new home or last minute holiday. The personal demand increases by almost double fold when compared with income slab. Personal loans are even available if borrower had the misfortune of having bad credit.

The borrowers can avail personal loan in either secured or unsecured category depending upon the cash need and repaying capacity. The unsecured form for instance, comes with the opportunity to borrow loan amount without placing any valuable property as collateral. The collateral-free loans are popular among both tenants and home-owner. In this loan option, the borrowers can unleash an amount that ranges from £1,000-£25,000 with a flexible reimbursement term of six months to 10 years. Unsecured category of personal loans carries a slightly high rate of interest which is affordable by the tenants or homeowners. No collateral is involved so, lenders offer the loan on basis of credit history.

On other hand, the secured personal loans are approved on the basis of valuable collateral which is offered to the lender against the loan amount. Lenders or financial institutions accept property that carries good market value. The collateral involved in the secured category of personal loan is land, car, house, valuable documents etc. Under this option, the borrowers can avail minimum loan amount of £5,000 and maximum amount of £75,000. This amount can be stretched further depending upon the collateral value. The repayment term is flexible as it ranges from10-25 years. Therefore, the borrower enjoy feasible rate of interest over flexible period of time.

The amount availed can be used to meet various needs and luxuries such as buying of newly launched car, going for holidays, funding high education, meeting wedding expenses of daughter’s marriage, undergoing cosmetic surgery, renovating or reconstructing home etc.

Personal loans can be availed through traditional and online source. There are many lenders available who are ready to offer their services at feasible rate of interest. The presence of online calculator helps the borrowers to compare and contrast the loan quotes easily.

a 10 ac lot is $150000, but being sold as land, it has a small house and trailer on it with utilities which make it livable, but not considered value. i want to get a loan to buy the land but explain that i will be living on the property. Can i expect a bank to loan me something less then the customary 20% down on land loans?