Contractor City Blog

When you have completed the plans and the specifications for your new house, take two copies of each to the loan company, explain your financial set-up to them, and ask for a loan to build the house.

They may require that you get a bid from a reputable contractor to give them an idea of the actual cost of the proposed construction.

If you apply for an FHA loan, you should have previously procured a little booklet setting forth the things they require in a house before it is eligible for such a loan.

Many people, underestimating the cost of the building, do not arrange for enough money to complete the job.

Nothing is much more perplexing and discouraging than to get the house as far along as the completion of the plastering and not have money enough to get it near enough to completion so that one can move into it.

While you are still paying rent at the old address, the payments are starting on the new house, and you can’t use it. So be sure to arrange to borrow enough to complete the job.

If you do not need all you Continue reading ‘How To Get A Loan For Your Building Project’ »

One of the most important steps you will take in the process of building your new home will be adequate budgeting. The biggest reason construction projects fail is costs are underestimated. Plan your budget carefully and be as informed as possible about one of the most critical phases of your building project: FINANCING!

The first thing you have to do is figure out how much you can afford to spend and how much building your new home is likely to cost. If you plan to act as general contractor, you will have to obtain a construction loan and a home mortgage. If you have good credit with your bank, you may be able to secure both loans from the same bank. If not, you may have to deal with two different lending institutions.

To get a general idea of the average cost per square foot for new homes in your area, call your local chapter of the National Association of Home Builders or check with local contractors and developers. Multiply the desired square footage of your new home by the average cost per square foot to arrive at a general cost. Developing a budget and calculating costs will Continue reading ‘Home Building Guide – Financing Overview’ »

Building Information Modelling

AEC firms around the globe are transitioning from 2D CAD Platforms like ACAD and Micro Station to 3D intelligent modelling in BIM. BIM technology provides a link between, design, construction and management along with improved productivity for easy retrieval of embedded data information. BIM support services provides you with an efficient way to transition from 2D platforms to intelligent modelling in order to reduce project cost, increase profitability and save time.

Following are some of the BIM support services:

• Building Information Model: BIM model for Architecture, Interiors and Engineering Projects. These files could be at any phase of the work such as schematic design, design development, construction documents or as built conditions. The file formats could be in the form of hand sketches, photographs, PDF’s, JPG’s, DWG, DWF’s, etc.

• 3D Visualization: 3d Models for renderings and animations. These models can also be used to study building geometry/massing and construction sequencing.

• Embedding/linking and extracting of various Information

• Conflict Detection: Identify conflicts amongst various design disciplines for delivering fully coordinated BIM model.

• Detail Library: Drafting details in BIM as a part of the project or as a separate library with customized line weights, hatch Continue reading ‘Bim and Design Support Services’ »

The number one riskiest industry in the country is construction.

More construction contractors go belly up than not, even in the best of times. Knowing this, many builders reason that the best solution for dealing with risk is to keep their business small, reducing the chance of failure. And still, many fail.

Continue reading ‘Job Costing Software: How To Save Your Construction Business’ »

The appraisal is just as important to your construction loan qualification as your income, assets and credit. The appraisal for a home to be built is even more important than an appraisal for a home that already exists. For a construction loan, the appraiser will do what is called a “plans and specs appraisal,” meaning they will examine the plans and specifications for the home to be built and compare it to existing homes in the immediate area that are similar.

An appraisal is an assessment by a licensed appraiser (an opinion, really) of the value of a particular home at a given time. The appraiser, who is licensed by the state, must follow certain rules regarding how an appraisal is conducted.

They must locate similar homes within a close proximity to your location (usually 1-3 miles) that are on similar size land. This is called finding “comparables,” or “comps.” A “comp” is not a “comp” if the home has not sold on the open market within the last six months. This can be stretched up to a year, but most lenders prefer six month old comps or less.

This means if you are Continue reading ‘The Construction Appraisal – What You Need to Know Before Your Loan Gets Denied’ »

Construction of your house is going on at a normal pace when the depleting finances threaten to disrupt the process. The derailment in the construction activity will significantly increase the cost of construction. If arranging finance within such a short notice is turning out to be a difficult proposition for you, then a construction loan will be helpful.

Construction loan is a short-term loan unlike mortgages and home loans that have a protracted repayment. The loan provider in this case will offer the loan until the borrower regains the occupancy rights to the home. This means that as soon as the borrower completes construction and makes the home as a primary residence or a second home, the loan is due for repayment.

There are no standardized guidelines to state the terms of the construction loan as in case of mortgages, which are governed by the rules made in Financial Standards Association (FSA). Depending on the individual case specifications and the degree of consideration that a borrower receives from the lender, a borrower may be able to get construction loans at differing terms.

The rate of interest for instance will be derived depending on the stage at which Continue reading ‘Construction Loans- Good As An Interim Measure Of Financing Construction Activity’ »

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 Continue reading ‘The Construction Loan Timeline and the Number One Mistake Most People Make’ »