Christian Commercial Construction Loan
A Christian commercial construction loan is available in a number of types of instruments, depending on the needs of the builder. There are providers that will provide a free estimate when the client fills out a form on line, providing a credit score, information about property ownership, estimated building costs and other pertinent information. In most instances, an answer can be obtained in under four minutes, so there will be no lengthy waiting in line or sitting around for an answer. Some of the programs available can be for the person desiring to construct a residence, but doing the work personally. For these people, a one time amount is available which will require all the usual information requested when applying for traditional lending instruments and borrowers can apply for up to $3,500,000!
Credit scores of course, will be examined. Scores only above 540 will be considered and the better the score the more money that can be borrowed. These instruments are usually for new construction only, but offer no penalties for prepaying ahead of time and do not require a reserve. Many times these co lenders will offer low fixed rates on a 30 year mortgage, and allow up to 95% to be borrowed against the value of the home. These same terms can be provided to those who do not wish to build the residence personally, but want a contractor to do it. Adjustable rate mortgages are also available and for a shorter period of time, such as 15 years. If the individual has credit that isn't so great, the lender can work with this situation also, and the funding is quick.
Some people just love their current home too much to leave it, decide to add on to their existing residence. If this is the case, then the commercial construction dollars will be based on the value after the construction has been completed. Should there be several change orders the crop up, then there will be delays in completing the project on time. Some lenders look at this unfavorably, but can work with the client to provide another type of lending instrument that will get the job done. Be sure to speak with the builder at all stages of the project to ensure both of you understand what is to be done, what materials will be involved and how much all of this will cost in order to avoid surprise change orders.
When the desire is only to purchase land, there are monies available for this purpose too. However, a very high credit score is required, so many individuals may not qualify. Not only this, but also these instruments are very short term, at most five years in length. When purchasing vacant land next to property where building will be done, then this can be added to or rolled into the mortgage, making an all-in-one package. "For the ways of man are before the eyes of the Lord, and he pondereth all his goings." (Proverbs 5:21)
The type of building being done can be almost anything: for apartments, condominiums, retail space, industrial purposes, multi-purpose, etc. Perhaps a small business owner wants to build out office space. This can be accomplished easily. In order to obtain these dollars, the payer will perform some calculations first to be sure that if the payee defaults or cannot complete the project, then the property can be sold to get back the money. The calculation is referred to as a profit test, which discovers the developers potential profits as a total percentage of the project cost. Should the profit turn out to be less than 20%, the deal probably will not be made.
Payors also have other calculations to perform, depending on the type of project under consideration. One of these is called a LTV ratio. The dollar amount is divided by the fair market value of the completed project, and then multiplied by 100 percent. In order to get the fair market value, the completed project will need to be appraised. Most trustees providing money of multi-use and apartment dwellings will not agree to a ratio above 80%.
Should further dollars be needed, then another type of option is available which is called a Mezzanine funding. This type of instrument has the company stock as collateral in case of default, instead of property. Foreclosure happens very quickly, in just a few weeks in most cases. These options can be quite large, and it is rare to find a banker that will approve for amounts fewer than 2 million dollars. Also, the project should be quite large to be acceptable.
A business funding, many times, will not be amortized over 10 years. After the project is completed, a permanent solution is needed to pay off the original debt. Monies of this type are referred to as a takeout. These are generally extremely easy to come by. Just be sure to shop around to ensure the best parameters are presented for each individual situation. No matter what the need is, the individual will most likely be able to find what is necessary for their venture.
Christian Condo Construction LoanA can be the answer for those desiring to pursue new interests, rehab existing condominiums or build new office units. Depending on the market and how well sales are, payors can provide any amount of money dependent upon the credit rating and other factors. In general, the desire is to see that the person shows experience in the industry, has capital, has done the homework of getting the necessary permits put into place, has considered carefully the viability of the project and has the sales and marketing support to ensure the property is lucrative upon completion.
Many offering a condo monies will not likely make a deal for less than one million dollars. Also, the property should be well situated to have adequate access to interstates and main avenues of traffic. The interest must be paid whenever a draw is requested, and in general, that money can be rolled into the total amount requested to cover payments. Also, there will inevitably be changes made to the plans that were not foreseen, and so this will cause change orders to occur. In order to ensure these amounts are covered, a contingency fee is added to the amount requested, usually up to 10% of the total amount requested. The final mortgage amount will be based on the value of the property after all changes have been completed, and is referred to as the equity. Of course, these dollars will usually be higher for a new than for existing that has already been acquired.
Builders interested in obtaining a condo construction funding must make sure that all the plans are completed and ready to go, that the specifications are evident, and have information about who will do the work. Trustees want to be comfortable knowing that the company doing is financially solvent so that all the work will be completed without difficulty. Also, trustee may engage someone to provide oversight of the project who will report back to them regarding the progression of the work. These are based on the potential amount of rental income that can be extracted from the units from all types. The idea is to upgrade to the point that the income is larger after the improvements have been made than if no improvements were made. In many cases, the units are sold off to pay down the mortgage.
There is another option loan that is provided to those who own property and plan to build condominiums on it, but sell the land tracts in order to have enough money to put down before actual work commences. Many times progress will not take place until there is certainty that people are interested in buying, and this is why a certain number of tracts need to be sold before negotiation can begin. Those who purchase will discover that the price of these dwellings will be less than if acquired after the work has been completed. Purchasers should be sure to do the homework in ensuring the reservation agreements are carefully prepared, with the understanding that there is a certain amount of time to decide to back out of the deal if necessary. Should the deal go forward, then a down payment is made which will be a certain amount of the full purchase price and a contract signed. After the project has been completed, then a Certificate of Occupancy will be provided prior to closing.
It may also be a good idea to find out about the permanent community after all the units have been built. There may be an association fee that must be paid on a monthly or yearly basis to provide for upkeep of the grounds. Also, do not let the contractor try to increase the price of the unit to the value it will be after the work is completed. The price should be lower. Do not forget to negotiate that all important interest rate to get the very best.
The aging of America has brought the unit into play as a viable real estate commodity for the Christian senior. Those over the age of fifty look forward to the continued pride and enjoyment of owning their place of residence but want to shun the responsibility of maintenance and upkeep, kind of like wanting the dog that licks your face and cuddles with you but having to walk him every day isn't required. Because cleaning the gutters and shoveling the snow are things of the past, small units continue to rise in popularity and the person who not only knows how to get handle this issue, but also knows how to use it to make large profits will be not looking for work any time soon. But in the midst of making money and having few household chores to do, the living Jesus tells all people something profound. "I am the way, the truth and the life; no man cometh unto the Father but by me." (John 14:6)