Construction Loan Application- Our Experience

Two weeks ago, Mike and I sat down with the bank.  Now, I know many of you know of the troubles we had with this same bank (different branch) in trying to set up our construction loan.  They plugged everything they needed to into their computer and they were magically coming up with closing costs of over $30,000!  Needless to say we were quite upset about it seeing that we’ve already dumped everything we have into the land itself and the improvements that we’ve made on it (ie the driveway).  Even though we told these two individuals that we shouldn’t have to come up with anything considering how much we’ve already put into the property and the fact that we’ve owned it for over a year, they didn’t do anything about it.  The people we worked with had never done a construction loan before- so they didn’t really understand how they are supposed to work.  Our benefit was that we had talked to a woman at that same bank about a year before and she had given us a bunch of information on what kind of closing costs we’d have and how the construction loan works.  Unfortunately, this woman retired, so we had to go to this set of people that had never done one before.

That was in late February, just before our wedding.  They had submitted our application even though we asked them to hold it until Mike and I could decide what to do.  Once it got submitted, our credit was checked…awesome.  We pulled the application so that Mike and I could get some answers on this stuff before we officially got the application into the bank. 

We got back from our honeymoon and started to set in on this project again.  This time, we decided to call around to other banks, get more information, and make sure that we are covered so that we don’t have to come up with a ridiculous amount of money just to try to secure a loan when we already have put so much into the property.  I called around to a bunch of different banks- many don’t actually do construction loans anymore.  The couple of other banks that I talked to had some very strange and ridiculous rules- obviously protecting the bank, but in no way allowing us to build with a clear mind- it would’ve been a constant worry if we weren’t busting butt.

So- we were back at the original bank.  This time, I talked with this guy (who I actually talked to right after we asked the other two to put our application on hold until we figured out what to do) and he was much more knowledgeable.  He had done construction loans before, but it’s not something they do all the time- which makes sense seeing that people aren’t really building right now.  So we set up an appointment with him for March 16^th to start the process all over again.  Come to find out- he needed to leave so we were sent to a young lady named Betty. 

I won’t lie, we were really nervous because she hadn’t done very many construction loans either and said herself that she would be using Mortgage Support to help her through the process, which is what the guy that we were supposed to meet with, advised.  Mike was pretty tense at first.  Betty was a real sweetheart.  We explained to her everything about the property, what we paid for it, what we put in for improvements, and how long we’ve owned it.  Mike explained that we were told by this woman about a year ago that there would not be a need to come up with anything upfront for a down payment since we had paid so much on the property already (and this was BEFORE we made changes to it!). 

Betty understood and we finally got to a point in the preliminary check of what our closing costs would be.  They looked MUCH better, but still included things like the Transfer Taxes and Title Insurance, etc.  We already paid all that when we purchased the property so why is it on there?!  Needless to say, the mortgage application at TD Bank is NOT friendly if you are looking for a construction loan.  Anyways- we agreed to the closing costs with the understanding that a few items would disappear and we started the application process.

Mind you, at this point, we sat there trying to figure out the closing costs and trying to make the numbers work for about 45 minutes.  I had left work at 2 to try to get back for 3.  Keep that in mind as we go through the next steps.

Betty walked us through the application.  We told her what we were looking to borrow, the value of the land (which we kept saying the original asking price plus the improvements we’ve made), and how much we still owe on the property.  We get to the closing costs part again and it has a ridiculous closing cost again (upwards of $30,000).  What the heck is going on?!  So on the phone with Mortgage Support and we go back through the beginning portion of the loan again to try to fix it.  A woman that works on loans often came into the bank at that point too and Betty pulled her in to try to help as well since the numbers weren’t working for us.  We finally figured it out and the young lady that helped us went to her desk to work on other stuff, and she let mortgage support go. 

That’s when her computer froze- completely locked up.  At this point it was already 3:45 PM and I’m in a panic thinking – they’re going to kill me at work!  So- we had to start the process again.  At this point, we’ve worked the numbers 4 times to get the closing costs to be agreeable- where it’s not $30,000 that we have to come up with.  If we had that kind of money, we probably wouldn’t be asking the bank for a loan- just saying.

So- we start it again.  Had the same problem AGAIN!  Betty called Mortgage Support again and got on the phone with a woman named Amy.  She was good.  What was happening was our land was being counted twice.  We do owe on it, but we put what we owe into the cost of construction to cover what is left over on the land.  That’s not what was messing up the mortgage application- in fact, it was two little BUTTONS that say- is the property mortgaged and is there money owed on the property.  If these are checked, it goes into closing costs.  Ridiculous!  Even Betty said that this was the most ridiculous form for a construction loan and it wasn’t friendly to our type of situation.  I don’t think using that form would be friendly to anyone period unless you were trying to buy a regular home.

We finally got through the process.  They ask some very odd questions like- what’s the value of the project… well what we are going to put into it is this- but it will be worth more than that- obviously.  Well, they want to know what it’s WORTH.  How the hell do we know?  We are not appraisers!  So a rule the bank has is they will support the land + 80% construction costs.  Our situation is different because we already own the land (and we thought this was the best, easiest way to get this done and be ahead of the curve). That being said, we need to have our house appraised at X amount in order to be able to cover what we project our construction costs will be plus the closing costs (which are small, but we’ve dumped every penny we own into this project.  The funny part in all of this is we asked for a loan on a total amount with labor- but we will only be using a small portion of that labor because Mike, myself, and whoever wants to help us, will be doing the work… will you work for Pizza and Beer?! J  Anyways- our estimated project cost is actually much higher than what we need because of the labor that’s built in. 

Regardless, we do need the appraisal to come in high so that we don’t have to come up with ridiculous closing costs.  By the time we gave Betty our life stories and signed away our first born so that we could build a house, it was 5 PM.  I missed three hours of work because the application system that TD uses is not user friendly at all for construction loans.  I thought I was going to die… Got back to work just past 5 and stayed till about 7 to make up for some of the time.  The nice thing is, my coworkers understood.  I didn’t get any real heat and explained what happened to the team manager and he was pretty cool with it.  I still felt super guilty, so I stayed to make up some time, then I made the rest the next week.

This whole process has been a bit of a nail biter since the start because there are SO many unknowns.  And you should see the PAPERWORK involved- holy CRAP!  I’ll make that a separate post- it’s just too much to keep going now.  I think it’s important to know what kind of paperwork is involved in a construction loan so that you understand what is expected.  We went to the bank with everything we thought we needed including specs, plans, plot plans, amort  calc on the land and payment history, the entire packet we received from the closing on the land to begin with- including the title insurance, tax returns, my pay stubs for the past month, ID, and septic approval.  We don’t currently have a building permit- that comes next week when we go to the town for it.

Building our home, one step at a time, learning patience, and loving more.

Obtaining a Physical Address, Septic Design, and Finishing Clearing!

I know it's been a while since I've last written, so for that I apologize.  We have been at a little bit of a standstill- waiting for the winter to be over so we can dig.  We have gotten a lot done though!

After the driveway was put in, we decided to try to get an address.  We thought it was going to be a pain to do, but really, it was quite easy!  We need the physical address for the State for when we submit the Septic Design.

How to get a physical address:
Contact your Selectman's Assistant (at least that's what we had to do!).  Let them know you are looking for a physical address and they will contact the Emergency Services person (in this case, it ended up being a friend of my Dad's!).  This individual is in charge of making sure that addresses are updated for emergency purposes (if you call 911 and need ambulance services, he makes sure that everything is up to date).  What he will need is your lot and map number (and frankly if you don't have it memorized at that point, I'd be surprised!), and you need to sign a little piece of paper that goes to the state.  THERE IS NO CHARGE (how awesome is that!?).  Anyways, it takes about 2 weeks normally to get the physical address.  The way they figure it out is they take the numbers from either side of your property (if you have neighbors) and do some measuring.  Figure out feet and have some sort of calculation that figures out what your physical address is.  It's kind of neat really.  They have to measure to the driveway apparently.

The other thing we've accomplished is an approved Septic Design!  Our Septic Guy (Pete Bissell) came out after the October storm of 22" when all the snow had melted off again, and did some digging.  He did the perc and did some calculations and what not and drew up a really nice design.  It's pretty impressive actually.  You have to go to the Selectmen at your town to get it signed off on.  He explained it all to us at a meeting a couple weeks ago now.  We were afraid that the town was going to give us trouble at first, but I think they were sympathetic, listened to Pete, which explained everything, and signed off.  It was really cool actually!  An example of what a Septic design looks like is:

This is kind of what one looks like.  Ours has lots of pretty colors, some elevations, etc.  It's really neat to look at actually!  Pete did a great job in designing it.  

After the town signs off on it, we write a check to the state DES (Department of Environmental Services).  You also write a check to the designer of course!  But there is no other cost at the town level... yet.  Once you get the signatures, the designer sends it to the State.  They approve it and send you a piece of paper (which I didn't really understand at first... it's all in typewriter format on a carbon copy type paper).  The Septic Designer then sends you a copy with the state signatures/approval on it.  

We also accomplished cutting many many more trees to clear the land since I last wrote.  We will have a rather large yard when we are done.  We were afraid that we were going to have to pay someone to take the logs out (very few hardwood, lots of soft), and were blessed to have a friend of my Dad's come over and wanted all the short softwood that we cut (5-6 foot lengths so that Mike and I could man-handle it to a pile somewhere... what a workout!).  

He asked what we planned on doing with the rest of the logs (the large ones) and we said we needed to find someone to take them.  Our prayers were answered about 2 hours after this friend of my Dad's came.  He brought back another guy, an older gentleman, that trucks for a mill.  He said he'd take it all! :)  Mike and I had been moving slowly to clear because we'd clean up and move the logs/brush out of the way to try to keep it cleaner.  Now we found someone to take the logs!  How exciting!  He's already taken 50 tons of logs off our property, and still has quite a bit to  go!  Mike worked all week to clear the rest.  The only thing standing now is the hardwood.   Pictures Below!  Please know this was soooo wooded at one point, that there was much more shade!  

Where our house will be...

Love this Tractor.  I want one just like it!  Winch, Thumb, and All!

The left side of our property now

Backyard area

A small portion of the logs coming off the property!

Mike did have a mishap last week when he was clearing (without me since I had to work, but was with his Dad and this older gentleman).  He cut a tree down and it got wedged in another.  He started limbing it and one of the big limbs jumped up and whacked him in the face.  He chipped his front tooth, got a nice gash on his chin, and his mouth was so swollen that night.  Not exactly what I wanted to hear a mere week before the wedding!!  Fortunately, his beard covers the gash, the swelling has gone down, and if you didn't know the story, you wouldn't know that his tooth was chipped.  It's crazy though because we started slowly clearing the property in July, took a break when Dad ended up in the hospital, and then again when his cousin was building his house, and all this time, no one got seriously hurt until then.  Of course, that makes me feel comfortable that he wants to go and keep cutting.  Ugh!

Next step: We are going to the bank tomorrow to see if they will approve our house and give us money!! WOOT!

That's the update for now!  I've been crazy busy with wedding planning and such.  I can't believe that I'll be taking his last name this Saturday.  It's come up so quick!  Can't wait to spend the rest of my life with him.

Building Dreams, Building our Future <3

A Little Discussion Goes a Long Way

I sent an email to the town rep yesterday (as you know) that I would like to pick up the road bond either today or Monday.  I guess he was away at meetings all week, so he hadn't been able to get back to me.  Coincidentally, he called my Mom (because she works with said rep) and said that the lawyer  should have it ready today or Monday.  Yay!  I've found that you have to get a little pushy with this town in order to get them to do anything... but at least this part is over!

I also emailed the guy that takes care of getting physical addresses yesterday since I hadn't  heard back on the process for that.  He asked me if I filled out paperwork, which I didn't know we had to, but he was great.  He was like no problem, I'll bring it over to the property tomorrow and we can meet up then.  Come to find out, he  is one of my Dad's friends!  So when I told Dad I was meeting him, he wanted to see him too.  This guy was awesome.  Dad launched into a conversation about what Mike and I had gone through just to get the driveway.  He said that the road agent was an ass and really hard to work with.  It cracked me up!  He told me that he would've told the Road Agent to pound sand when we told him that the road agent wanted us to get the driveway engineered.

Mike was afraid that I was  going to piss off the town if I got too pushy, but after talking to the emergency contact of Sharon, it only renewed my spirits to really go after them to get what we want.  I don't disagree with Mike that we need to be careful and pick our fights carefully, but at the same time, we shouldn't back down either!

oh, p.s. The guy taking care of the physical address for us told us that we didn't need the second culvert, that it was just a waste.  That also made me laugh, especially after how I told him we were trying to squeal out of getting the driveway engineered.

Driveway Complete!

Well since the last time I posted, our driveway has been completed!  Eric was able to put the whole driveway together in a quick turnaround time (3 days in total really) and we have an apron... of 20 feet.  We aren't completely pleased with the apron, so the people that did it originally are due to come back and fix it.  We think they put it down cold so it's a bit crumbly and bumpy, and that's not what we were looking for.

In any case, the driveway was considered finished almost 2 weeks ago.  I asked the town to send out the road agent to sign off on the road bond being complete.  Of course, I can't expect much from this road agent seeing that he doesn't like to work WITH people.  They have yet to get back to me on the status of the road bond.  It's really starting to tick me off, so I sent another (4th or 5th) message to the town rep that I use and asked him what the status was and that I would like to pick up the check from the lawyers office tomorrow since all obligations have been fulfilled.  If there was a question about the apron, it's there, and I even had Mike shovel it off on Tuesday in case the road agent hadn't looked at it yet.

The best part is, I have before and after pictures.  The road is completely untouched, which is why I'm starting to push harder on the road bond.  We gave them the road bond within two days, so I expect to be treated fairly and have the same turnaround time that we gave them.  It's only respectful.  That being said, I told the town contact that I will be going to the lawyers office tomorrow to pick it up, and if it's not ready then, I will have my Mom pick it up on Monday.  I'm done playing this game, especially when this money is due to Eric.  It's not fair for him to be waiting on the town when the road is in the exact same condition it was before he even started.

That's my spiel.  I'll let you know how it goes after I visit the lawyer tomorrow!

Let's have some more road blocks... with a side of fries please...

Since my last posting, we've received our Driveway Permit.  It was like pulling teeth to get the Road Agent to meet up with our contractor (Mike's cousin Eric) for the driveway, but it happened because the one Selectman that wanted to help us is a good friend of the road agent apparently.

We met with both the selectman and the road agent along with Eric a couple of Saturdays ago.  We were able to get the location OK'd.  In the background, we found out that the road agent was giving Eric a very hard time about how the driveway needs to go in and all this crap he needs to do.  He kept saying to Eric that he was concerned for our safety (meaning Mike's and mine) as well as others on the road.  The way it sounded was that the road agent was badgering Eric.  Eric finally got fed up and told him that he's Mike's cousin so of course he wants to do a good job and make sure it's safe!

So not only did we have to put a huge bond in ($3000!! Let me tell you my heart jumped into my throat when we were told this amount) for the Road Bond (so don't screw up the road and we get it back), but now that Eric is ready to start the driveway, he's getting more crap from the Road Agent.  Eric's truck broke down but he wants to move forward with this project so Mike and I can finally drive up into our lot instead of lug all our crap from the road, which isn't safe in itself.  He has a friend that trucks so he has to get new trucking permits for his friend so that it's all legal.  He wanted to start the driveway today, but it was raining so, can't really do this stuff in the rain.

Anyways, the trucker that's going to be trucking in stuff to our land freaked out that it was in this particular town because of how much he dislikes the road agent.  Apparently, we aren't the only ones that have had serious trouble with this road agent or with the town in general.  Serves us right for wanting to live in a nice town I guess.   It makes me sad to say that I have a bad taste in my mouth because of this process.  Anyways, he agreed to truck for us anyways since Eric's truck is down.

So after the road agent freaked out on Eric, they were finally able to set a time to meet tomorrow (since Eric is pushing to start this tomorrow) at 8 AM.  Well apparently, Eric just got another call from the road agent which then told him that he can't be there till 11 AM.

This is just becoming more and more BS.

On top of all of this, when we got our permit there was a two page addendum. One that addendum from the Road Agent, there included a minimum apron that must be put on the driveway before it's considered complete... it's 20 freaking feet!  There is no reason for an apron to be so long!

I have so many words for this Road Agent and for the town.  We've had nothing but headaches since we started this process.  I can't imagine what building our house will be like... but this just pisses me off to the point where I want to do it just in spite of them.  They don't want to see our house from the road (and right now, where we plan on putting our house, they won't... they never said anything about garages... maybe we should build the garage right in view and have it so that it's multicolored or super ugly.  Anything to piss them off at this point.

I know, that's not nice of me... but someone needs to talk to them.  This is absolutely ridiculous!

Warning to all: If you decide to try to buy land in what seems to be a small, quaint, pretty town... think twice and look elsewhere... if you are looking to live in the same town as us... DON'T DO IT!

Driveway and Progress... They Do Go Together!

Well, it looks like we are finally getting somewhere on our land.  We met with the Selectmen this past Tuesday.  As some of you already know, we’ve been getting the run around since day 1.  We don’t have a driveway yet and we’ve been actively trying to get one since the early part of March.  We started this process, though, in January!

So we went to the Selectmen’s meeting on Tuesday to discuss what we need and what they need.  The road agent told us that we MAY need an engineer to determine the size of the culvert for our driveway.  We kept being told that we may need an engineer to engineer our driveway.  Well, here’s the problem.  We’ve pretty much exhausted our resources in trying to find someone that can engineer a driveway.  We were laughed at when we would tell them that we were looking for an engineer that could engineer our driveway.

We were laughed at because it simply doesn’t exist in NH.  People who have been in the driveway profession for decades have told us that it’s the Road Agents’ job to determine the size of the culvert.  The Road Agent was telling us we need to find an engineer to do it. If we were actually to get a Civil Engineer, it would cost us a fortune for them to engineer our driveway!  Mike also said that at the meeting to help drive another point home. 

So at our meeting on Tuesday, Mike took the floor and discussed what we’ve done thus far.  He discussed how we got our permit, the length of time it’s taken to not even have a driveway, and what we are going through now.  It was a plead for help but he was extremely firm on points that he gave.  I think they could tell that we were frustrated and at the ends of our rope.  I let Mike do most, if not all, the talking because he was doing such a good job explaining everything and showing his frustration in a very professional kind of way.  I was really impressed, actually! 

Near the end, the guy sitting to my right spoke up and said that they needed to help us.  He really spearheaded the rest of the conversation and asked if he could keep a copy of the application and all the materials that we had brought with us.  He said he was going to talk to the Road Agent and try to work something out.  I got a call earlier today from this particular selectman saying that he was planning on having breakfast/coffee with the road agent in the morning and wanted Mike to give him a call tonight to see if Mike and our driveway contractor could meet them in the morning.  I left Mike a message to let him know and I’m hoping they both can!!

PROGRESS!  It’s such a beautiful thing!

Cross your fingers for us!

Driveways and Small Town Politics...

The Selectmen’s meeting is in about a week, and Mike and I are trying to get everything together for it.  We have the wetlands permit, the driveway permit, and according to the application details, we just need to basically put together a plot plan with where our driveway is and whatever obstructions there might be within 500 feet in each direction.  I believe it was 500 feet anyways…

But guess what, we have to do more than what’s on the application now.  Mike met with the Road Agent yesterday.  I’m beginning to think twice about EVER buying land in this town, which to me is really sad because I’ve always wanted to live in a quiet, peaceful little town, but just this driveway process has been so incredibly infuriating.  We have everything required to get our driveway permit, except for the Selectman’s and Road Agent’s signatures, which requires that plot plan.  When Mike met with the Road Agent yesterday, the Road Agent said we’d have to get in touch with the planning board.  I had already sent an email to the Selectman’s assistant (which seems to be the ONLY person in the town offices that knows what the heck is going on!) because the Road Agent hinted about this when Mike talked to him last week to set up a meeting to see the property and where we want to put our driveway. 

Not to get too far off subject- but if there are other special requirements, why isn’t it written in the applications or any other area that we can find?!  They aren’t even written down anywhere!  If I have one thing that absolutely drives me up a wall, it’s when we ask what is required and only get half of it.  When it comes to applications and permits normally everything is written in plain text right there… Hello?  Anyways, the fact that we had to contact the Planning Board isn’t what upsets me the most.  Mike called the head today (coincidentally, the Selectman’s Assistant is also the Secretary for the board… and he’s the one that told us that we didn’t have to contact them!!!) and the head told Mike that they have nothing to do with the Driveway. 

What ticks me off the most is that the Road Agent wants us to get our driveway ENGINEERED.  Are you frikken serious?!  He wants us to get an engineer in there to tell us what size culvert we need…  Well it says on YOUR application that YOU are supposed to tell us what size culvert we need IF you want to see it a size other than 15” in diameter!! Plus- why can’t we just use the same size as what’s going under the road that links the other side to ours, which is where most of the water is coming from anyways?  I swear they are trying to pull out every road block POSSIBLE to keep us from building a home- and that just makes me want to dig in my heels and be even more hard headed than I already am!  I’m sick of playing this game- but if that’s how you want to play- fine- I can play this game. 

Small town politics is really infuriating.  I recommend anyone looking to buy a house or a piece of land in a small town to think twice.  We’ve been trying to build JUST a driveway for about 9 months now!  REALLY?!

Love always finds a way… and so shall we!