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Construction Home Loans & Multiple Offers!

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On last week’s show, I had the honor of sharing the mike with my former with co-host, Frank Percival, as my regular co-host Keith Pitsch was on vacation.

Our first guest was Susan Chase, from Keller Williams, Seattle Metro West. We talked about setting realistic expectations for both buyers and sellers. If you’re a seller in Seattle’s multiple-offer market, it’s important to strategize with your broker regarding how to effectively price your home so you get the bare minimum price you want (and hopefully, a lot more). As a homebuyer, it’s important you have realistic price expectations regarding what you can afford. Even if you’re approved for a top-dollar mortgage, and find yourself embroiled in a multiple-offer situation—evaluate what your can really afford in a monthly mortgage payment. Your lender and your agent can help you evaluate affordability.

Susan has a pet project via YouTube and social media called www.seattlemania.com. The goal of her site is to introduce people to small businesses and neighborhoods around Seattle. As a former small business owner, Susan knows how hard it can be to get a business off the ground. She also hopes that her project will inspire visitors to feel like they have a connection with at least one individual or business in a particular neighborhood. It can be helpful for people relocating to Seattle and you should check it out!

Our second guest was Tom MacArthur, a mortgage originator with Banner Bank in Edmonds. Tom educated us about construction home loans. So often, when you’re shopping for a home, you’re choosing from a pre-built home that someone else designed. But what if you wanted to build your dream home fit to your specific requirements? That’s where a construction loan comes in.

The appraisal and application process for a construction loan is a little different, as it’s based on the future value of the home based on blueprints, finishes, and location. But the rest of the loan application process is pretty similar to the process of applying for a traditional loan. It’s also a little different of a timeline, approximately 30 years and 9 months for a traditional loan (9 months being the typical time it takes to approve and build the actual property). During the build, your payments are interest-only based on the money you’re using to build the actual home. When the house is finished and officially closes—the payment switches to the home’s value and the 30-year term of the loan. There are also strategic ways to finance a loan, specifically through Banner Bank, so it will include the price of your buildable home lot, not just the actual construction of the house.

It was a great show! If you have any questions about the topics we covered, feel free to contact me with any questions.

Thank you,
Eric


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