Well, some good news; the sewer lien on the property (approx. 12k) will probably not have to be paid up front, there is already a twenty year payout plan in place and the town hall will transfer it to us because it's a family to family transfer. Whew! However, it was mentioned in passing that most banks won't give out construction loans when there is a lien on the property. Because of the circumstances that I will own the land outright, and the construction loan will be for the house only, I'm crossing my fingers that the lien will not be part of the deal.
Our potential banker Gary, from New Alliance Bank, called. We barely squeak over the 200k mark in the preapproval process. That is certainly a mixed blessing. First, 200k was probably the minimum amount that we could even consider when thinking about this project, and negatively, my cousin Tom has estimated the building costs as significantly more. Admittedly we are hoping to put a lot of "sweat equity" into the construction, but the difference is worrisome.
The main reason we squeak by is (other than I am an underpaid teacher :) )the fact that we still own our home. The banker said he had to factor in both mortgages into account. Teri and I tried selling the house last year with no success. However, and again it gets complicated, our neighbor, who rents 1/2 of a duplex has asked us to rent our property to him... UGG. Do I really want to become a landlord? Do I want to just price the house to sell? I certainly can not put the house on the market yet so I just don't know what to do right now.
Next, I visited the surveyors today. They have an unofficial site map of the property. I asked them for a quick copy so that we could lay the footprint of the potential house on it to see if it would fit. This part is so exciting. When I got home Teri and I just opened up the map and stared. This is going to happen!
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Congrats on your new house project. I used Garry Wallace at New Alliance Bank as well, he was great to work with. I'm on my 2nd disbursement now. The process has been very smooth with them. My only complaint is how little they give you for the 1st disbursement. It gets spent pretty fast depending on how you agree to pay for excavation, concrete, and framing. I imagine every bank will limit the amount they give you up front to make sure you don't go to the casino and put it all on red.
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